“Orders for big-ticket U.S. goods jumped 3.6% in May, mainly because of more demand for commercial jets and military equipment. Economists surveyed by MarketWatch had expected orders to rise 3.8%...Stripping out the volatile transportation sector, orders [rose] a much smaller 0.7% last month. Orders for core capital goods, a key barometer of private-sector business investment, advanced a modest 1.1% but posted the third straight gain.” Story at…
http://www.marketwatch.com/story/us-durable-goods-orders-climb-36-in-may-2013-06-25-8913023
BOND MARKET STAMPEDE (CNBC)
A bond sell-off has been anticipated for years, given the
long run of popularity that corporate and government bonds have enjoyed. But
most strategists expected that investors would slowly transfer out of bonds,
allowing interest rates to slowly drift up. Instead, since the Federal Reserve chairman, Ben S. Bernanke, recently suggested that the strength of the economic recovery might allow the Fed to slow down its bond-buying program, waves of selling have convulsed the markets…
…The recent pain has spilled over into stock markets, pushing the Standard & Poor's 500-stock index down an additional 1.2 percent on Monday.” Story at…
http://www.cnbc.com/id/100840444
BONDS A BARGAIN?
“…some analysts say investors are overreacting to the latest
statements by Fed chairman Ben Bernanke, who has stressed that the central bank
will do more if the economy falters. "I
think that soon, investors will figure this out and start to buy again,"
said Kevin Giddis, head of fixed-income at Raymond James. "In the
meantime, it is hard to watch." Story at…http://money.cnn.com/2013/06/25/investing/bonds-treasuries/index.html?iid=HP_LN
This is a threat.
Panic in markets is never a good thing.
Many have expressed grave concerns over run-away interest rates; the
ongoing sell-off in the bond market represents that risk, but as noted above, it
may reverse and interest rates are far from catastrophic.
TRADER COMMENT
“Downside target for Nasdaq is roughly 3060 and for
S&P roughly 1460 unless things fall apart in a bear market. Good luck trading, Don”
HAVE I MENTIONED THAT I HATE ALL POLITICIANS?
There are always unintended consequences of the
ill-conceived political “solutions” the clowns in Washington dream up. This is from Mish Shedlock at Global Economic
Analysis:Immigration Bill Incentivizes Employers To Fire Americans and Hire Amnestied Immigrants; Immigration and Obamacare’s Employer Mandate
Read more at http://globaleconomicanalysis.blogspot.com/#JjmoXWPLViXrE13l.99
Mish presents a logical and well thought out case.
MARKET REPORT
Tuesday, the S&P 500 was up 1% to 1588 (rounded).
VIX was down about 8% to 18.47.Tuesday, the S&P 500 was up 1% to 1588 (rounded).
The S&P 500 is close to its lower trend
line at about 1550 (my assessment). Today’s
bounce may simply be a response to where others see the lower trend line.
NTSM
Tuesday, the overall NTSM analysis remained SELL at the close. The first
NTSM sell signal in this cycle was on 16 April at S&P 500 1575.
Sentiment, Volume and VIX are all negative and the “panic-indicator” flashed
sell Thursday (on the huge down day).
Price is positive; more on that in Market Internals below.
MARKET INTERNALS
Internals improved today, as expected on the up day. The 10d-MA of breadth is still only 44%;
above 50% represents a healthy market.
There was a big turn in “spread” for new-high/new-lows. Spread is the difference between the numbers
of stocks making new-highs vs. new-lows.
Yesterday the spread was -525; today it was -95. That suggests a turn in the markets and a
possible bottom, but there are so many other negative indicators now that it is
hard to know what is signal and what is noise.
This indicator is in the Price category of the NTSM analysis, but it is
only one indicator and it always takes more than one indicator to call a
buy. Further, my classical “bottom-analysis”
looking at price, volume, and market internals did not indicate yesterday as a
bottom. Still, this warrants following
carefully. We’ll just have to see what
happens with other indicators in the next couple of days.
SENTIMENT is now neutral: The 5-day moving average was down to 65%-bulls in the
Guggenheim/Rydex funds I track as of tonight's (Tuesday’s) close.
MY INVESTED POSITION
I remain about 20% invested in stocks as of 5 March (S&P 500
-1540). 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.
