If you read any of Mike Shedlock’s commentary on the onerous European proposal (see prior blogs) to Greece, it is a wonder Greece accepted it….but they haven’t accepted it yet, so we are not completely out of the woods.
RETAIL SALES DOWN (MarketWatch)
“Americans purchased fewer goods and services at retail stores in June, showing little appetite to boost spending despite a gradually improving U.S. economy. Retail sales fell a seasonally adjusted 0.3% in June to mark the first decline in four months….” Story at…
http://www.marketwatch.com/story/retail-sales-shock-wall-street-slide-for-first-time-in-four-months-2015-07-14
PERCENTAGE OF STOCKS ABOVE THEIR 200-DAY MOVING AVERAGE
This is a dangerous looking chart. The NYSE Composite is nearly range bound, unable to climb much above its prior highs since July of 2014; and the % of stocks above their 200-dMA has been falling since June 0f 2013. We’ve been saying this for a while – If this condition persists, the markets will be in trouble. Fewer and fewer stocks are supporting the market.
Chart from…GLOBAL WARMING…NAH! IT’S AN ICE AGE (MarketWatch)
“European scientists warn that by 2030, a decade of winters with deep freezing temperatures could bring about a “mini ice age” the likes of which hasn’t been seen in 370 years...“…comparing to real data for the current solar cycle, we found that our predictions showed an accuracy of 97%...” Story at…
http://www.marketwatch.com/story/global-freezing-a-mini-ice-age-is-on-the-way-by-2030-scientists-say-2015-07-13
My cmt: Sorry Al Gore, Rush Limbaugh will have a field day with this! It could be serious though; you can’t grow crops in an ice age.
MARKET REPORT/ANALYSIS
-Tuesday, the S&P 500 was up about 0.5% to 2109 at the close.
-VIX was down about 4% to 13.37.
-The yield on the 10-year Treasury was down to 2.4%.
Technically, the markets look good (in the short term), but with some important questions to be resolved. The biggest question ahead is, “Can the S&P 500 finally break thru the 2130 barrier that has essentially been in place almost all year?” The S&P 500 was 2117 back in February; it’s lower today. If the 50-dma of advancing stocks can climb above 50%, I’ll feel a little more confident. The 50-dMA of advancing stocks remained 49% Tuesday, but the 20-dMA was UP so this indicator is headed in the right direction. (Below 50% is a bad for the stock markets.)
In the last 10-days, 54% of the total volume on the NYSE has been up-volume. (That stat was 48% Monday.) Above 50% is good.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) climbed to 56% at the close Tuesday. (A number above 50% is usually GOOD news for the markets.
New-highs outpaced New-lows Tuesday. The spread (new-highs minus new-lows) was +66. (It was +41 Monday.)
The 10-day moving average of change in the spread rose to +38 Tuesday. In other words, over the last 10-days, on average; the spread has INCREASED by 38 each day. Internals remained POSITIVE 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
I issued a BUY signal based on improved market internals Monday. Tuesday the NTSM long term indicator is HOLD.
MY INVESTED STOCK POSITION
On Monday, 13 July, I increased my investments from 30%
invested to 50% invested in stocks. I spilt stock investments roughly equally
between S&P 500, Euro/pacific ETF (EFA), and the Dow Jones Completion Index
(DWCPF) as noted in an earlier post. TSP ALLOCATION (This is a conservative position most appropriate for retirees or very conservative investors.)
G-Fund (Risk-free yielding 2.1% over the last 12-months): 50%
C-Fund (S&P 500): 15%
S-Fund (DWCPF): 15%
I-Fund (EFA): 20%
