“U.S. crude oil inventories rose 8 million barrels last week, the government-run Energy Information Administration (EIA) reported. The build was more than double the 3.9 million barrels forecast by analysts in a Reuters poll…" Story at...
http://www.cnbc.com/2015/10/20/oil-falls-after-industry-report-shows-surge-in-us-crude-stocks.html
My cmt: Crude prices were down more than 2% today.
BACK TO THE FUTURE DAYOctober 21, 2015 was the day Doc Brown took Marty to the future in “Back to the Future II.” Can the markets go back to their past? Bob Janjuah thinks so…
MARKET TO MAKE NEW HIGHS (CNBC)
“Bob Janjuah…(t)he Nomura analyst...told clients in a note Tuesday to watch the 2,020 level on the S&P 500. As long as that holds, he thinks the market likely is going up and may even make a run at its historic high.” Story at…
http://www.cnbc.com/2015/10/20/this-market-bear-thinks-stocks-could-make-new-high.html
My cmt: Oops. The Index finished at 2019 - below Janjuah's support level.
MARKET REPORT / ANALYSIS
-Wednesday, the S&P 500 was down about 0.6% to 2019 at the close.
-VIX finished up about 5% to 16.52.
-The yield on the 10-year Treasury dipped to 2.03%.
Wednesday, the “Overbought” conditions on the A/D Ratio (breadth) and the RSI (Relative Strength Index) have both been cleared. That doesn’t mean “all-clear” though. “Overbought” usually signals a top. So we might expect the index to track lower until we see an “Oversold” condition. That’s in a perfect world, so we’ll just have to see what happens. I still expect some pullback – how much remains to be seen.
The 200-dMA of the S&P 500 is now sloping up, hinting at a trend change, but the S&P 500 remains 2% below its 200-dMA and that’s a problem for the bulls.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) fell to 53% Wednesday vs. 58% Tuesday. (A number above 50% is usually GOOD news for the markets. On a longer term, the 50-day moving average of advancing stocks dipped to 50.2%, still OK, but it’s falling and that may be a bad sign.
New-highs outpaced New-lows Wednesday. The spread (new-highs minus new-lows) was +27. (It was +45 Tuesday.) The 10-day moving average of the change in spread was + 0 Wednesday. In other words, over the last 10-days, on average; the spread has remained unchanged each day. The internals remain neutral on the markets, but they deteriorated significantly today.
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 indicator was BUY. Price and VIX indicators are positive. Sentiment and Volume are neutral. I am not following this guidance for the time being. The NTSM system is a trend following system and other indicators (overbought conditions; inability to break appreciably above 2030; falling up volume; deterioration in Internals) are suggesting we may see a turn down soon. If that doesn’t happen, I will be buying stocks.
I will wait
before increasing stock holdings; I think there will be a better entry point.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
G-Fund (Cash, risk-free yielding 2.1% over the last 12-months): 70%
C-Fund (S&P 500): 15%
I-Fund (EFA): 15%
