“The pace of U.S. manufacturing growth slowed in April as the sector expanded only modestly, an industry report showed on Wednesday...The Institute for Supply Management (ISM) said its index of national factory activity fell to 50.7 from 51.3 in March, coming in below expectations for 50.9. A reading above 50 indicates expansion…
…[in a separate report] The Commerce Department says construction spending fell 1.7 percent in March, compared with February. It marked the second decline in the past three months. January activity plunged a record 4 percent, which represented a downward revision from a previous estimate of a 2.1 percent decline.” Story at…
http://www.cnbc.com/id/100694720
The construction slowdown was blamed on sequester – I’m
not sure about that. It’s too soon for
sequester to have much impact. Most
Federal construction contracts are awarded in late summer – that’s just the way
the funding works.
There is an issue that sequester may be impacting now: I
have friends in the Architect/Engineer community. One of them got laid off recently and he said
there were others. If the Engineers
aren’t designing the future projects, there will be a bigger slowdown in
construction ahead.
On a positive note, the PMI report showed future orders
were expected to improve, but it showed weak employment so we take the good
with the bad.
ANOTHER CRASH PREDICTION (CNBC)
“Chart patterns suggest a big stock market selloff could
be around the corner, technician Carter Worth of Oppenheimer Asset Management
said Tuesday…this May is in many ways worse in terms of bifurcation than we've
had at any point since the March '09 lows." [Bifurcation is a difference
in the direction of various segments of the stock market.]
Worth added that the pattern could be foreshadowing a
selloff…[AND]…maybe it'll be worse than just a normal correction.” – Carter
Worth, Chief technician at Oppenheimer.
Full story/video at…
http://www.cnbc.com/id/100692015REGRESSION TO TREND (Doug Short)
“About the only certainty in the stock market is that, over the long haul, over performance turns into under performance and vice versa…at the beginning of March 2013, [the S&P 500] is 57% above trend, up from 56% at the end of the previous month. In sharp contrast, the major troughs of the past saw declines in excess of 50% below the trend. If the current S&P 500 were sitting squarely on the regression, it would be around the 991 level. If the index should decline over the next few years to a level comparable to previous major bottoms, it would fall to the 450-500 range.” – Doug Short, Advisor Perspectives, dshort.com. Analysis, charts and discussion at…
http://advisorperspectives.com/dshort/updates/Regression-to-Trend.php
Jeepers! We’re just full of good news today.
MARKET RECAP
Wednesday, the S&P 500 was down 0.9% to 1,583 (rounded).
Wednesday, the S&P 500 was down 0.9% to 1,583 (rounded).
VIX was up 7% to 14.49
Today was a “statistically significant” day
based on my analysis of price and volume action. This usually results in a reversal the next
day and the odds favor an up day for Thursday by almost 2 to 1 - no guarantees
of course. Wednesday’s drop may trigger strong enough buying to give me a
statistically-significant UP-day Thursday and that would be a top-signal I have been
expecting. Of course, we must keep in
mind that I have called a top several times…and this market just keeps going
up. Buy in May and buy again the next
day! Aaarrgghhh!
Speaking of buying…
BANK OF ISRAEL TO DOUBLE EQUITY HOLDINGS
(Bloomberg)
“The bank will increase its stock holdings to as much as
6 percent of foreign-exchange reserves, or about $4.5 billion, from 3 percent
at the end of 2012, according to Yossi Saadon, a Bank of Israel spokesman. Investments in shares rose to
about 4.5 percent of assets in the first four months of 2013 as the institution
made a “small allocation” to European equities in addition to its U.S. funds,
he said.”
It wasn’t long ago that I mentioned in this blog that
foreign sovereign banks were buying equities.
ZeroHedge reported that Israel invested heavily in Apple! …So much for any comfort that the foreigners
know what they are doing. What they ARE doing… I think…is driving up the US
markets.
Bloomberg story at…http://www.bloomberg.com/news/2013-05-01/bank-of-israel-to-double-equity-holdings-amid-europe-push.html
NTSM
Wednesday, the NTSM analysis was again HOLD at the close.
Sentiment is again at extreme levels at 64%-bulls so that indicator is suggesting sell; other indicators are neutral.
MY INVESTED POSITION
I remain about 20% invested in stocks as of 5 March (S&P 500
-1540). My reasoning may be found at…http://navigatethestockmarket.blogspot.com/2013/03/why-i-got-mostly-out-of-stock-market.html
The NTSM system sold at 1575 on 16 April. (This is just another reminder that I should
follow the NTSM analysis and not act emotionally – I am under-performing my own
system by about 2%!)
I have no problems leaving 20% or 30% invested. If the market is cut in half (worst case) I’d
only lose 10%-15% of my investments. It
also hedges the bet if I am wrong since I will have some invested if the market
goes up. No system is perfect.
