“Factory activity in the U.S. mid-Atlantic region grew at a slower pace in January, a survey showed on Thursday. The Philadelphia Federal Reserve Bank said its business activity index fell to 6.3, the lowest since February 2014, from 24.3 in December. That was shy of economists' expectations for 19.9, according to a Reuters poll.” Story at…
http://www.cnbc.com/id/102341263
NY FED: EMPIRE MANUFATURING UP (Business Insider)
“Manufacturing activity in the New York area picked up in January. The Empire State Manufacturing index jumped to 9.95 in January from -1.23 in December…” Story at…
http://www.businessinsider.com/empire-manufacturing-january-2015-2015-1
JOBLESS CLAIMS (MarketWatch)
“The number of people who applied for unemployment benefits in the first week of January shot up to the highest level in four months. So-called initial claims are prone to sudden swings after the holiday season, so it’s unclear if the increase reflects any deterioration in what’s been a rapidly improving U.S. labor market. Initial jobless claims climbed 19,000 to 316,000 in the seven days ended Jan 10...” Story at…
http://www.marketwatch.com/story/jobless-claims-hit-highest-level-since-september-2015-01-15?dist=lcountdown
OIL TO $31 (Reuters)
“Oil prices steadied below $49 a barrel on Thursday after a volatile day with North Sea Brent and U.S. crude oil dipping toward near six-year lows as another big U.S. bank slashed its oil price forecasts. Bank of America Merrill Lynch (BOAML) cut its crude oil forecasts on Thursday saying Brent could go as low as $31 by the end of the first quarter of 2015. "Stocks all over the world are building at a very fast rate," BOAML analysts said…” Story at…
http://www.reuters.com/article/2015/01/15/us-markets-oil-idUSKBN0KO08B20150115
SWISS ABANDON EURO CAP (BBC.com)
“While the Swiss Franc was held at 1.2 to the euro it had tracked the euro’s fall against the dollar. Many believe the euro will fall further if the European Central Bank (ECB) starts quantitative easing, buying bonds to push cash into the Eurozone banking system to stimulate a recovery.” Story at…
http://www.bbc.com/news/business-30829917
For some, this was good news since they suspect it predicts a QE type move by the ECB.
MARKET REPORT
-Thursday, the S&P 500 was down about 0.9% to 1993 (rounded).
-VIX was up about 4% to 22.39.
-The yield on the 10-year Treasury Note fell again to 1.73%.
Both the VIX and the bond market are negative on the stock market.
BOTTOM?
I would like to have seen a bigger down-day to signify a small panic bottom or an S&P 500 close above 2000. Neither happened, but the S&P 500 did make a new-low on lower volume. Sometimes this signifies a bottom, but it’s not always a good signal during a small correction. We’ll have to watch tomorrow’s market action. If I had to guess, I’d say the 200-dMA of 1966 is likely to hold and be the bottom if it wasn’t today.
RSI, (SMA-14)
Relative Strength (that measures the size of up vs. down moves on a 14-day moving average basis) cycles between tops and bottoms. RSI dipped into oversold territory late in the day and finished at 30.2, slightly above the oversold level of 30. The 3-recent downturns have turned up at an RSI of about 25, a day or two after hitting 30.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) dropped to 46% at the close Thursday. (A number below 50% is usually BAD news for the markets.) In a positive reversal, new-highs outpaced New-lows Thursday. The spread (new-highs minus new-lows) was +69 (It was -86 Wednesday). The 10-day moving average of change in the spread rose to minus-6. In other words, over the last 10-days, on average, the spread has DECREASED by 6-each day.
Internals remained neutral on the market and up-volume has been improving slightly and that has been enough to keep a neutral rating.
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 and VOLUME indicators remain negative; Price moves have been positive with larger up-moves than down; other indicators are neutral. NTSM is close to switching to sell, but not yet.
I remain fully invested at 50% invested in stocks. 50% is conservative, but appropriate for a retired guy.
