“Ultimately, when the market breaks over the high we made this past week, we should see follow through to new all-time highs, which is our signal that we should next be setting our sights upon 2150.” Story at…
http://www.marketwatch.com/story/has-the-sp-rally-to-2200-begun-2015-02-09?dist=afterbell
S&P 500 RISING FASTER THAN EARNINGS – RECIPE FOR DISASTER…
…sooner or later. Green = Price. Blue = EPS (earnings per share)
Chart from FACTSET at…MARKET REPORT
- Monday, the S&P 500 was down about 0.4% to 2047 (rounded).
-VIX was up about 7% to 18.58.
-The yield on the 10-year Treasury Note rose to 1.96%.
STILL WATCING THE CHARTS (REPEATING THIS UNTIL IT RESOLVES)
The S&P 500 made it to the 2060 level (2063 to be exact, last Thursday). I said Wednesday, “2060 doesn’t just look like resistance (an area that the market indices are finding difficult to exceed); it looks like a brick wall. The S&P 500 has been higher than 2060, but it hasn’t stayed there and it has experienced 7-large, up-moves to that level with little or no follow-thru going all the way back to 21-November. I’ll feel more bullish if the Index can get thru the significantly thru the 2060 level. If not, it will be correction time again.”
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) dropped to 51% 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 +37. (It was +110 Friday). The 10-day moving average of change in the spread was minus-17. In other words, over the last 10-days, on average, the spread has DECREASED by 17-each day.
Internals remained neutral on the market, but now only breadth is keeping them from a Negative indication.
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
Monday, the NTSM analysis is HOLD. The PRICE indicator is positive; VIX, Sentiment and Volume are neutral.
MY INVESTED STOCK POSITION
I remain fully invested at 50% invested in stocks in the long-term portfolio. 50% is conservative, but appropriate for a retired guy.
My position in the S&P 500 is very small now. I have invested in the Dow Jones US Completion Total (^DWCPF) instead, because that is the only small-cap choice in my retirement account. (The DWCPF includes all stocks EXCEPT the S&P 500.) I expect small caps to outperform multi-nationals this year. For my reasoning see “Time to Lean Toward Small Caps” at…
http://navigatethestockmarket.blogspot.com/2015/01/fomc-meetinglean-toward-small.html
