“With 97% of the companies in the S&P 500 reporting actual results for Q3 to date, the percentage of companies reporting actual EPS above estimates (77%) is above historical averages, while the percentage of companies reporting actual sales above estimates (59%) is equal to historical averages.” Factset Earnings Insight at…
http://www.factset.com/websitefiles/PDFs/earningsinsight/earningsinsight_11.21.14/view
CHINA AND EUROPE TO STIMULATE; HAPPY DAYS ARE HERE AGAIN…NOT! (CNBC)
"You need to remember, their weakness is not our weakness, and their strength is not our strength," the "Mad Money" host [Jim Cramer] said. Yes, it is wonderful that the Chinese lowered interest rates and there were promises coming from the European Central Bank President Mario Draghi. "But until we actually see the gigantic infrastructure of jobs in the decrepit sewers and polluted wastelands that engulf China, until we see that the Germans spend $500 billion to stimulate their economy—something that Angela Merkel's government appears unwilling to do—you need to be careful," Cramer warned.” Story and Video at…
http://www.cnbc.com/id/102209438?__source=yahoo%7cfinance%7cheadline%7cheadline%7cstory&par=yahoo&doc=102209438
RECORD FOREIGN INFLOWS (Seeking Alpha)
“Data shows that foreigners are now accelerating their purchases of U.S. securities. It's no surprise given the U.S. Fed is slowing its asset purchases while other central banks are expanding. In addition, the U.S. has higher interest rates and higher economic growth, which looks to be accelerating as seen by the increase in leading economic indicators…should [the SPDR junk bond ETF (JNK) and the Russell 2000 ] continue to weaken, we could be in store for a small pullback and investors would be wise to keep a close eye on JNK and the Russell 2000 for clues.” Commentary at…
http://seekingalpha.com/article/2703205-u-s-sees-record-foreign-inflows-as-economic-indicators-reach-decade-highs
SHORTING THE MARKET – NOT SUCH A GREAT IDEA THIS WEEK?
One of the trader boards I visit has a few members who are shorting big now. The time before a Holiday is one of the most positive for the markets, especially the 2-days preceding a holiday. The board in question is mostly day-traders. I am not a day-trader and it is not clear now that my reasons for forecasting a pullback are still valid.
I noted before that the S&P 500 was 4.4% above its 50-day moving average and that was a concern. It is, but upon further investigation, by itself, this stat may not mean much because it is influenced by the recent correction and quick bounce off the bottom and that suppresses the 50-dMA. A better stat for this overbought indicator would be the level of the S&P 500 above the 200-dMA. Presently, the Index is 7% above the 200-dMA. 10% is the trouble point for that stat. There are other reasons too.
The percentage of stocks above their 200-dMA is rising so it is not as great a worry that the level this indicator is low at 55%. Another concern I had was that the Index spent 6-days in the range of 2038-2041. That is no longer a major worry because the Index is now about 1-1/2% higher than that level.
RSI remains high at 93 and the Index is above the top of its upper trend line. These indicate that a normal drop of a couple of percent (expect 5%) can be expected, but timing is not clear as long as the Internals remain strong. My guess is that some selling will start Monday.
MARKET REPORT
Monday, the S&P 500 was up about 0.3% to 2069 (rounded).VIX was down about 2% to 12.62.
The yield on the 10-year Treasury Note fell to 2.30 so the Bond Ghouls remain worried.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) remained 53% at the close Monday. (A number above 50% is usually good news for the markets.) New-highs outpaced New-lows Monday. The spread (new-highs minus new-lows) was +138. (It was +192 Friday). The 10-day moving average of change in the spread was minus-4. In other words, over the last 10-days, on average, the spread has decreased by 4-each day. Internals switched to neutral on the market since the 10-day change in daily spread is declining.
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
The long-term NTSM system analysis remained neutral Monday.
MY INVESTED STOCK
POSITION
I moved some funds back into the market on 17 October
2014 as a trade and increased my position
in stocks from 30% to about 40% overall.
I added more 20 Oct, to bring my stock investments up to 50%. I am
semi-retired, 50% is Fully-invested for me. I remain 50% invested in stocks.--INDIVIDUAL STOCKS FROM A VALUE HOUND--
ENSCO (ESV): BUY
The chart looks good and oil prices are close to a bottom so I think Ensco is again a Buy. See related video on this page…
http://finance.yahoo.com/q?s=esv&ql=1
Ensco price is going to reflect oil prices. If you think they are near a bottom, this is a great buy with high dividends. If not; it’s a dog.
