“Initial claims for state unemployment benefits dropped 8,000 to a seasonally adjusted 287,000 in the week ended Sept. 27, the Labor Department said…Thursday's data is "consistent with the continued, solid performance in the labor market," said Keith Hembre, chief economist at Nuveen Asset Management in Minneapolis.” Story at…
http://www.reuters.com/article/2014/10/02/us-usa-economy-idUSKCN0HR1BL20141002
FACTORY ORDERS (Reuters)
“New orders for U.S. factory goods posted their biggest decline on record in August…The Commerce Department said on Thursday new orders for manufactured goods dropped 10.1 percent. That was the largest drop in records going back to 1992…Stripping out transportation orders which were depressed by a plunge in the volatile aircraft component, new orders were down a more modest 0.1 percent.” Story at…
http://www.reuters.com/article/2014/10/02/us-factory-orders-idUSKCN0HR1KA20141002
MARKET REPORT
Thursday, the S&P 500 was up a whisker, essentially unchanged at 1946 (rounded).
What a wild day! The index was down about 1% around mid-day.
VIX was down about 3% to 16.16.
The yield on the 10-year Treasury Note rose to 2.42%.
CORRECTION WATCH – CORRECTION OVER?
Depending on how you draw your charts, one can make a
strong case that Thursday the S&P 500 bounced from its lower trend line,
just as it has in every downturn in 2013 and 2014.
Thursday, the Index tested
yesterday’s low on lower volume with some improvement in internals (not as much
as I’d like), but this is suggesting the pullback is over.
VIX continues to be at a value that is too low for a
correction and it fell 3% Thursday.
Breadth and new-hi/new-low data are thru the floor low. The 10-dMA and 20-dMA of Breadth (I measure Breadth as % of stocks advancing) are both
well below values that were present at the BOTTOM of the 2010 and 2011
corrections of 16% and 19% respectively. Either this pullback is nearly over or
it is going to be one for the record books.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) fell to 39% at the close Thursday.
New-lows outpaced New-highs Thursday.
The spread (new-highs minus new-lows) was minus-238. (It was -232
Wednesday). The 10-day moving average of change in the spread fell to minus-28.
In other words, over the last 10-days, on average, the spread has decreased by 28
each day. Internals remained negative.
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
Thursday, the NTSM long term indicator is HOLD.
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
Oil prices need to stabilize before the oil services companies can recover. I think this stock remains a BUY, but it isn’t pleasant to hold on to it while it has declined.
