“The economic slowdown early this year was less severe than previously estimated, raising expectations for stronger growth later in 2015. Gross domestic product, the broadest sum of goods and services produced across the economy, contracted at a 0.2% seasonally adjusted annual rate in the first quarter…” Story at…
http://www.wsj.com/articles/u-s-first-quarter-gdp-revised-to-0-2-contraction-1435149168
CRUDE INVENTORIES DOWN (fastFT)
“Rejoice oil bulls. US crude oil inventories continue to fall. Stockpiles fell by 4.9m barrels to 463m in the week to June 19, the eighth straight drop, according to the latest data from the Energy Information Administration. However, stockpiles remain near levels not seen at this time of year in at least 80 years.” Story at…
http://www.ft.com/fastft/349811/eia-oil-inventory-2
CREDITORS REJECT GREEK PROPOSAL (LATimes)
“Stocks retreated Wednesday, erasing all of the week's earlier gains, as negotiations between Greece and its creditors seemed no closer to reaching a resolution.” Story at…
http://www.latimes.com/business/la-fi-wall-street-20150624-story.html
MARKET REPORT
-Wednesday, the S&P 500 was down about 0.7% to 2109 at the close.
-VIX rose about 10% to 13.26.
-The yield on the 10-year Treasury Note fell to 2.37%.
Market Internals deteriorated and are now neutral on the markets.
It is disconcerting that the S&P 500 is not getting meaningfully above its prior highs and you can pick any peak in 2015 as a measuring point. The S&P 500 is now only about 2.5% above its value on January 2nd.
The 50-day value of stocks advancing is only 48.8%. Simply, that means that less than half of the stocks on the NYSE have been going up over the last 50-days. That’s a worry, especially if other indicators also turn negative. For now let’s say I am concerned.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) dropped to 50% at the close Tuesday. (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 +28 (It was +99 Tuesday.) The 10-day moving average of change in the spread fell to minus-2. In other words, over the last 10-days, on average; the spread has DECREASED by 2 each day. Internals switched to neutral on the markets.
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 2014, using these internals
alone would have made a 9% return vs. 13% 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,
nearly straight-up year like 2014.
NTSM
Wednesday, the NTSM long-term analysis remained HOLD. PRICE, VOLUME, VIX and SENTIMENT indicators are neutral, although (as always) sentiment remains extremely high.
I remain fully invested at 50% invested, mostly in smaller cap-stocks in the long-term portfolio with some international stocks. 50% is conservative, but appropriate for a conservative retired guy.
The Dow Jones US Completion Index (all stocks except the S&P 500 – the “S” fund in the TSP) remains ahead of the S&P 500. Since 1 February it is 4.1% ahead of the S&P 500. Since 1 March the Euro-Pacific ETF (EFA) (“I”-fund) is 2.5% ahead of the S&P 500.
THRIFT SAVINGS PLAN (TSP) MEMBERS
My current TSP Allocation: 50%-G; 10%-C; 20%-S; 20%-I. (50% cash is too high for non-retirees, however, the “G”-fund did return 2.2% over the last 12-months and that is exceptional for risk-free money.)
