“Filings for U.S. unemployment benefits fell last week to
the second-lowest level since 1973, as employers show scant willingness to fire
workers amid a tightening labor market. Jobless claims dropped by 5,000 to
249,000 in the week ended Oct. 1…” Story at…
EARNINGS (CNBC)
“According to FactSet, analysts collectively expect S&P 500 companies' third-quarter earnings to
show a roughly 2 percent drop from the third quarter of 2015. This, according
to FactSet, would represent the sixth straight quarter of year-over-year
earnings declines, for the first such streak going back to the third quarter of
2008, which is when the company started collecting such data.” Story at…
My cmt: CNBC presents this as a bad news story. Oddly, most
market participants seem to think this may be good news. Earnings are still falling, but not as fast
as they have been. For context, on 8 June 2016 I wrote the following:” FactSet
reported that earnings are expected to decline 4.8% year-over-year for the
second quarter of 2016 ending June 30. As they noted, this would be the first
time the index has recorded five consecutive quarters of year-over-year
declines in earnings since Q3 2008 through Q3 2009. We are reminded that
Q1-2016 earnings were down nearly 7%.”
MORE DEBT NEEDED (Mishtalk.com)
“Today we learned from the IMF that World Debt Hits $152 Trillion. That’s a record breaking
amount. It’s also more than two times the size of the entire global economy. The
problem is: It’s simply not enough.” Commentary at…
MARGIN DEBT AS A MARKET INDICATOR (Advisor Perspectives)
“There are too few peak/trough episodes in this overlay
series to take the latest credit-balance data as a leading indicator of a major
selloff in U.S. equities. However, current level is well off its record close
in April of last year and showing a pattern similar to what we saw following
the market peaks in 2000 and 2008.”
Additional charts and commentary from Doug Short at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 was up a point to 2161 at the
close.
-VIX dipped about 1% to 12.84.
-The yield on the 10-year Treasury rose to 1.74%. (This
indicates selling of Treasuries since price moves are opposite to the yield.)
My Short-term indicators are mixed, but are declining. Perhaps we’ll have a clearer view Friday.
Long-term, I’m fully invested at 50% in stocks (a
conservative-retiree allocation) – that’s hold my nose bullish.
TRADING PORTFOLIO
2x S&P 500 ETF (SSO): Established Thursday, 22 Sep.
As noted above, the short-term indicators are mixed, but
declining. This may be a sell tomorrow.
THURSDAY MARKET INTERNALS (NYSE DATA)
-10-day moving average of the percentage of stocks
advancing (NYSE): 46.1%. (49.9% yesterday.) A number below 50% is usually
BEARISH for the markets short-term.
-150-day moving average of advancing stocks: 53.9%. (A
value above 50% indicates an up-trend.)
- McClellan Oscillator: declined from -18 to -23
(percentage calculation method).
- New-highs minus new-lows: +68 (It was +99 yesterday.)
-10-day moving average of the change in spread: -9. In
other words, over the last 10-days, on average, the spread has declined by 9
each day.
Market Internals
remained neutral on the market.
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).
LONG TERM INDICATOR
Thursday the Price, Volume, VIX & Sentiment
indicators were neutral. Overall the long-term indicator remained HOLD.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I increased stock allocation to 50% stocks in
the S&P 500 Index fund (C-Fund) Friday, 23 Sep in my long-term accounts
based on a number of indicators. Remainder is 50% G-Fund. This is a
conservative retiree allocation.
