PHILADELPHIA FEDERAL
RESERVE SURVEY
NEW YORK — “Mid-Atlantic
manufacturers report business conditions unexpectedly contracted this month,
according to a report released Thursday by the Federal Reserve Bank of
Philadelphia. Hiring also turned negative... The Philadelphia Fed said its
index of general business activity within the factory sector fell to -5.8 in
May from 8.5 in April. It was the first negative reading in eight months.” From the Wall Street Journal
That was bad news and
there’s more…
LEADING ECONOMIC INDICATORS (LEI)
BLOOMBERG – “The index of
U.S. leading indicators unexpectedly fell in April, indicating the pace of
economic expansion may cool…The Conference Board’s gauge of the outlook for the
next three to six months decreased 0.1 percent after a 0.3 percent gain in
March, the New York-based group said today. Economists projected the gauge
would rise by 0.1 percent, according to the median of 49 estimates in a
Bloomberg News survey.” Full story at…
I am not an economist so analyzing
how bad the above news may or may not be, is not in my skill set; but, it’s not
good news and it follows with what John Hussman, Phd, has been suggesting.
REMINDER FROM JOHN HUSSMAN
John Hussman of Hussman
Funds has been warning of a slowdown for some time. Perhaps that time is now. In his most recent market commentary he
said,
“(During these) conditions
that match the worst 2% of our return/risk estimates...the market has lost an
average of 20-25% just in the following 6-month period.”
– John Hussman, PhD, Weekly
Market Commentary. See the complete weekly
commentary at: http://www.hussmanfunds.com/
MARKET
The S&P 500 was DOWN 1.5%
Thursday to 1305. VIX rose 10% to 24.5. The S&P 500 is currently 2% above its
200-day moving average, but I think the bottom this time will be lower. The final stage in a correction is usually a
waterfall near straight-down move over a week or so. In the
bear market of 2008 it took about 3-weeks – let’s hope we don’t see anything
like that!
NTSM
The NTSM analysis remained
to SELL Thursday.
MY INVESTED POSITION
I have been carrying a
position in the QQQ (Nasdaq 100) and I have flip-flopped whether it was
long-term money or trading money. I
guess it’s a mix, because I sold that position in the early afternoon at 62.2
to maintain my 10% gain. That lowers my
total Stock position to 15%.
Previously, I reduced my
stock holdings to 30% in the long-term portfolio (0% in stock in the 401k) at
S&P 1358 after the SELL signal on 9 May 2012. (See the page “How to Use the
NTSM System” – the link is on the right side of this page).
