“Private-sector job creation popped in December, with companies adding a better-than-expected 241,000 workers, according to payroll processor ADP.” Story at…
http://www.cnbc.com/id/102314941
FED: INTEREST RATE RISE AFTER APRIL – LOW OIL PRICE IS GOOD (Business Insider)
“The Federal Reserve probably won't raise rates until April according to the Minutes from the latest FOMC meeting. Specifically, the Minutes show that, "Most participants thought the reference to patience indicated that the Committee was unlikely to begin the normalization process for at least the next couple of meetings," implying that the Fed is unlikely to raise rates at its January or March meetings. The Minutes also show that the Fed saw cheaper energy costs as a net positive for the US economy and the job market.” Story at…
http://www.businessinsider.com/fomc-minutes-january-7-2015-1
TIME TO PANIC? NO. (MarketWatch)
“There is the trading adage, ‘so goes January, so goes the rest of the year.’…I think that the positive underlying fundamentals will win the day and slow global growth and an oil market that has yet to hit bottom will not wake up the sleeping bear here in the U.S. And one more item of note. Looking back to the beginning of last year, the market got off to a similar start. So rather than forecasting gloom and doom for the rest of the year, I remain focused on the facts I know and for now, the facts and the recent selloff don't really line up.” – Bill Gunderson, editor of The Gunderson Report. Commentary at…
http://www.marketwatch.com/story/is-this-market-telling-us-its-time-to-panic-2015-01-07
MARKET REPORT
-Wednesday, the S&P 500 was up about 1.1% to 2026 (rounded).
-VIX was down about 6% to 19.31.
-The yield on the 10-year Treasury Note rose to 1.96%.
REVERSAL IN INTERNALS
I mentioned the reversal in New-high/new-low data Tuesday in the Market Internals and that trend continued today. That’s a good argument for a bottom (not great but good) so perhaps the S&P 500 will give some more clues tomorrow and continue up.
RELATIVE STRENGTH INDEX: RSI (14-day, SMA) = 61. The RSI reading is now giving a false signal because of the sudden turnaround (up sharply and then down sharply) within the last 14-days. Take out 2 up-days after the bottom of 16 December and the RSI would have been oversold or close to it Tuesday. That’s another reason that Tuesday might have been a bottom.
THERE IS NO 2015 CORRECTION, YET
Calling a bottom after a correction (>15%) is easier than calling the end of a little dip (like we’ve seen so far), so I am less confident here, but I think the markets will improve in the next several days and that will ease the worries of investors. I bought INTEL today for a couple of % less than when I took profits in December so that demonstrates my optimism.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) fell to 52% at the close Wednesday. (A number above 50% is usually GOOD news for the markets.) New-highs outpaced New-lows Wednesday. The spread (new-highs minus new-lows) was +125. (It was +13 Tuesday). 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 are neutral on the market. Other than Breadth, internals are negative but improving.
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
Wednesday, the long-term NTSM system analysis remained HOLD. The VIX indicator was negative; other indicators are neutral.
MY INVESTED STOCK POSITION
I remain fully invested at 50% invested in stocks. 50% is
conservative, but appropriate for a retired guy.
