“Initial claims for state unemployment benefits slipped by 4,000 to a seasonally adjusted 294,000 for the week ended Jan. 3…"Claims have never dropped below the 280,000-290,000 range in the last 20 years, reflecting the reality that a certain number of layoffs is a natural part of the growth/lifecycle of companies even in the best of times," said Anthony Karydakis, chief economic strategist at Millar Tabak in New York.” Story at…
http://www.reuters.com/article/2015/01/08/us-usa-jobless-claims-idUSKBN0KH19V20150108
VALUATION ANALYSIS BY DOUG SHORT (Advisor Perspectives)
Chart (and analysis at their site) from Advisor
Perspectives at…http://www.advisorperspectives.com/dshort/updates/Market-Valuation-Overview.php
Valuation bottom line: By most measures markets are significantly overvalued. As noted below by FACTSET, that is also true on a forward PE basis.
FACTSET VALUATION (Factset)
"The P/E ratio of 15.8 for the index as a whole is above the prior 5-year average forward 12-month P/E ratio of 13.6, and above the prior 10-year average forward 12-month P/E ratio of 14.1." Excerpt from...
http://www.factset.com/websitefiles/PDFs/earningsinsight/earningsinsight_12.19.14/view
One really can’t trade valuation because the markets can be overvalued for some time. They do set the stage for declines if there are other catalysts.
MARKET REPORT
-Thursday, the S&P 500 was up about 1.8% to 2062 (rounded).
-VIX was down about 12% to 17.01.
-The yield on the 10-year Treasury Note rose to 2.02% as stock market optimism rose..
I suggested yesterday that “perhaps the S&P 500 will give some more clues tomorrow (Thursday) and continue up.” Did it ever! Forget the market nay-sayers and follow the trend. The S&P 500 should make new highs.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) rose to 53% at the close Thursday. (A number above 50% is usually GOOD news for the markets.) New-highs outpaced New-lows Thursday. The spread (new-highs minus new-lows) was +198. (It was +125 Wednesday). The 10-day moving average of change in the spread was minus-7. In other words, over the last 10-days, on average, the spread has DECREASED by 7-each day. (That stat is skewed negative by the decline that occurred before the last 2-huge up days.)
Internals are neutral on the market. Other than Breadth, internals are negative, but internals continue to improve and that’s a positive take-away.
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 long-term NTSM system analysis remained HOLD. The VIX indicator is negative; VOLUME is positive; 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. I have been a buyer this week in my trading
portfolio.
