“Employers continued to add to payrolls in September as
record openings drew more Americans into the workforce and most found jobs,
indicating the U.S. labor market is settling into a pace that will support the
economy. The 156,000 increase followed a 167,000 rise in August…”
HOURLY EARNINGS (Marketwatch)
“It turns out that Goldilocks is real: the labor market
is not too hot and not too cold. In September the U.S. economy produced 156,000
new jobs, with increases in both the goods and services sectors. More
importantly, average hourly earnings grew at an annual pace that approaches 2
%—very solid. Hours ticked up somewhat as well, so the foundation of income
growth was solid.” — Douglas Holtz-Eakin, president, American Action Forum.”
Story at…
WHOLESALE INVENTORIES (CNBC/Reuters)
“The component of wholesale inventories that goes into the
calculation of GDP - wholesale stocks excluding autos - fell 0.3 percent in
August.” Story at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was down about 0.3% to 2154 at
the close.
-VIX rose about 5% to 13.48.
-The yield on the 10-year Treasury remained 1.74%.
My Short-term indicators are pointing down so I sold my
trading, long-position and switched to a short-position. Chart-wise the S&P 500 dropped below the
50-dMA today and is also slightly below the lower trend line. Both are slightly bearish indications. Market internals are bearish – the percentage
of advancing stocks is falling; advancing volume is falling; new-high new low
data looks bad and so on. The Pros were
selling today (late -day action) as they have been over the past month or so.
Selling isn’t rampant so this may not mean much.
All in all, I think we go down from here, but perhaps not
much. I think the market is a little
rattled by troubles with Deutsche-Bank. The
Index is about 4% above the 200-dMA so that is a logical support level if the
drop continues.
Long-term, I’m fully invested at 50% in stocks (a
conservative-retiree allocation) – that’s hold my nose bullish.
TRADING PORTFOLIO
2x Short S&P 500 (SDS): Established 7 Oct.
As noted above, the short-term indicators are pointed
down so I sold my trading, long-position and switched to a short-position. I am
doing more active trading in an effort to make up for holding shorts too long
this summer. Will it be success or disaster? I can’t say. The experts say that, on average, traders who
are more active do worse.
FRIDAY MARKET INTERNALS (NYSE DATA)
-10-day moving average of the percentage of stocks
advancing (NYSE): 46.0%. (46.1% yesterday.) A number below 50% is usually
BEARISH for the markets short-term.
-150-day moving average of advancing stocks: 53.7%. (A
value above 50% indicates an up-trend.)
-McClellan Oscillator: declined from -23 to -42
(percentage calculation method).
-New-highs minus new-lows: +39 (It was +68 yesterday.)
-10-day moving average of the change in spread: -4. In
other words, over the last 10-days, on average, the spread has declined by 4
each day.
Market Internals remained
negative 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
Friday the Price indicator was positive. 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.
