Confidence among consumers declined to a five-month low in September as Americans’ views on the economy dimmed…The Thomson Reuters/University of Michigan final index of sentiment decreased to 77.5 this month from 82.1 in August…“Most surveys show that consumer confidence has softened in recent months,” Ryan Wang, a New York-based economist at HSBC Securities USA Inc., said before the report. “The reading is still higher than a few years ago, and that’s mostly due to higher home prices and gradual improvement in the labor market." Story at...
http://www.businessweek.com/news/2013-09-27/consumer-sentiment-in-u-dot-s-dot-falls-to-lowest-level-since-april
I reported on this issue earlier, but here’s another note
of concern regarding junk-bond/S&P 500 spread.
JUNK BONDS ARE SENDING A CONCERNING MESSAGE FOR STOCKS
(Kimble Charting Solutions posted at Advisor Perspectives)
"If history is a good guide, the relative weakness of
junk bonds compared to the S&P 500 is sending a concerning message about
stock prices in the future." Charts at dShort.com at…http://advisorperspectives.com/dshort/guest/Chris-Kimble-130927-Joe-Friday.php
US CONSUMER SPENDING RISES AS WAGES BOOST FAMILY INCOME (Reuters)
“U.S. household spending rose in August as incomes were
buoyed by solid wage gains, signs that momentum could be growing in the U.S.
economy despite months of harsh government austerity. American families spent 0.3 percent more last
month than the month before…Commerce Department data showed on Friday…"The
pick-up in income growth in August suggests that consumption growth may even
accelerate in the fourth quarter," said Paul Ashworth, an economist at
Capital Economics in Toronto.” Story at…http://www.reuters.com/article/2013/09/27/us-usa-economy-idUSBRE98M0KO20130927?feedType=RSS&feedName=businessNews
MARKET REPORT
Friday, the S&P finished down 0.41% to 1,692 (rounded) at the close.
VIX was up 10% to 15.46.Friday, the S&P finished down 0.41% to 1,692 (rounded) at the close.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks
advancing on the NYSE fell to 53% Friday from 56% at the close Thursday. (A number above 50% for the 10-day average is
generally good news for the market.)
New-highs outpaced new-lows Friday, leaving
the spread (new-hi minus new-low) at +45 (it was +92 Thursday). The 10-day moving average of change in the
spread is plus 1. That just means that over the last 10-days, the spread has improved,
but not much.
Market Internals are Positive on the market
for this short term indicator.
NTSM
Friday, the overall long-term NTSM analysis remains
HOLD at the close.
The 5-day, percent-bulls
(bulls/(bulls+bears) in the Guggenheim/Rydex funds I track is 67%-bulls as of
Thursday’s close. (Friday’s values won’t be available until late tonight.) That is an extreme bullish value that is
usually a negative for the markets.
Most of the CNBC crowd are bullish on the
markets and suggest buying the dip. I’ll
try to keep an eye out for clues that might show the market has made a
meaningful bottom. The S&P 500 is
less than 1% above its 50-dMA and that has been a location when buyers have
stepped in previously. The index is 6%
above its 200-dMA and, barring panic, is another area when buyers may step in.
Perhaps the S&P 500 will finally see a correction, but not many believe that this is it.
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.
