“A former examiner for the Federal Reserve Bank of New York has dropped a major bomb on Wall Street by releasing 46 hours of secretly recorded audio that shows how the supposed government watchdog is nothing more than a lap dog for Goldman Sachs and other financial institutions it is tasked with regulating.” Story at…
http://nypost.com/2014/09/27/secret-recordings-expose-lax-wall-street-oversight-by-feds/
MARKET CRASH – JOHN HUSSMAN, PhD (Hussman Funds)
“The most hostile subset of market conditions we identify
couples overvalued, overbought, overbullish extremes with a breakdown in market
action: deterioration of breadth, leadership and other market internals, along
with a shift toward greater dispersion and weakening price cointegration across
individual stocks, sectors and security types (what we sometimes call “trend
uniformity”). The outcomes are particularly negative, on average, when that
shift is joined by a widening of credit spreads. That’s a shift we observed in
October 2000. It’s a shift we observed in July 2007. It’s a shift that we
observe today…I should be clear that market peaks often go
through several months of top formation, so the near-term remains
uncertain…Still…As conditions stand, we currently observe the ingredients of a
market crash.” Weekly
Market Commentary from John Hussman, PhD at…http://www.hussmanfunds.com/wmc/wmc140929.htm
WHAT THE LONGTERM CHART SAYS…
Correction back to 1650 (or so) is entirely reasonable
and that would be about a 15-20% correction.
When? That’s anybody’s guess. Regarding a crash, that is possible too,
but again the timing is the issue. None
of the longer term indicators are suggesting a crash now. If markets deteriorate, the NTSM indicators
will act up.
WHAT THE SHORT TERM CHART SAYS:
IF THE S&P 500 BOUNCES UP FROM 1950 – NO CORRECTION
Basic Chart from…http://finance.yahoo.com/q/bc?s=%5EGSPC+Basic+Chart
STOCKS ABOVE THEIR 200-dMA (Index Indicators)
Only 44% of all stocks are above their 200-dMA as of Friday’s close. This
stat remains more than 1-standard deviation below the mean and that level is a
point associated with a falling market or even a bottom. This is another way of looking at Breadth. My own analysis of breadth (I measure as the
percentage of stocks advancing) shows that only 45% have gone up over the last
10-days. Those are worrisome stats for the bulls; but the markets could be
approaching a bottom and actually may have bottomed already.
HIGH YIELD BONDS (SeekingAlpha)
“As we have written about, historically speaking the high
yield bond market has performed well during periods of rising rates, due to the
fact that the high yield market tends to have a lower duration than other fixed
income asset classes, has a zero to negative correlation to Treasuries, and
generally rates are rising during periods of improved economic environments,
which is a positive for these credits.” - To learn more about the risks with
actively managed ETFs visit our website
AdvisorShares.com.Story at…
http://seekingalpha.com/article/2520685-is-this-time-different-a-look-at-duration?ifp=0
MARKET REPORT
Monday, the S&P 500 was down about 0.25% to 1978 (rounded).
VIX was UP about 8% to 15.98. The yield on the 10-year Treasury Note fell to 2.49% at the close.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) rose 1% to 46% at the close Monday. New-lows outpaced New-highs Monday. The spread (new-highs minus new-lows) was minus-133.
(It was -117 Friday). The 10-day moving average of change in the spread rose to
minus-9. In other words, over the last 10-days, on average, the spread has decreased
by 9 each day. Internals switched to negative today due to falling Up-volume.
While internals look poor overall, there are signs of
improvement that suggest perhaps 1966 was
the bottom last Thursday. For example,
new-high/new-low data did not appreciably deteriorate on today’s down day. And
the 10-dMA of stocks advancing was up 1%.
Market Internals are a decent trend-following analysis of
current market action, but should not be used alone for short term trading.
They are usually right, but they are often late. They are most useful when they diverge from
the Index. In 2013, using these
internals alone would have made a 16% return vs. 30% for the S&P 500 (in on
Positive out on Negative – no shorting).
Of course, few trend-following systems will do well in an extreme
low-volatility, straight-up year like 2013.
NTSM
Monday, the NTSM is HOLD. Volume was positive, but all other indicators
are neutral.
MY INVESTED STOCK POSITION
I made a BUY call on Monday, 18 August 2014 because the
charts were looking better; therefore, I upped my invested percentage to 50%
invested in stocks on Tuesday 19 August.
The 5-10-20 Timer and Market Internals
both gave positive signals on 19 August confirming the previous day’s Buy
signal. 50% is Fully invested for me since I am semi-retired. --INDIVIDUAL STOCKS FROM A VALUE HOUND--
ENSCO (ESV): BUY
For my initial discussion see the NTSM blog at:
http://navigatethestockmarket.blogspot.com/2014/05/coppock-curve-says-stock-crash-nowblow.html
ENSCO’s chart doesn’t look good now since it has fallen below prior lows as the oil drillers have not performed well. On the plus side, dividend is 6%. PE is 8.5 so downside is somewhat limited.
TOO CHEAP TO IGNORE (Forbes)
“Ensco has a strong buy rating according to ValuEngine and is 19.6% undervalued with a one-year price target at $50.25.” – Story at…
http://www.forbes.com/sites/investor/2014/09/22/transocean-and-three-other-energy-stocks-too-cheap-to-ignore/?partner=yahootix
