“Retail sales excluding automobiles, gasoline and building materials increased 0.5 percent last month after advancing 0.3 percent in September, the Commerce Department said. Overall retail sales rose 0.4 percent after being flat in September…"It reinforces the current narrative of sustained growth momentum in the recovery going into the last quarter of the year, even at a time when the economy was contending with the headwinds created by the government shutdown," said Millan Mulraine, senior economist at TD Securities in New York.” Story at…
http://news.yahoo.com/retail-sales-beat-forecasts-point-firming-growth-133321619--business.html
FED TAPER LIKELY IN COMING MONTHS ON BETTER DATA
(Bloomberg)
“Federal Reserve officials said they might reduce their
$85 billion in monthly bond purchases “in coming months” as the economy
improves, minutes of their last meeting show.”
Story at…http://www.bloomberg.com/news/2013-11-20/fed-taper-likely-in-coming-months-on-better-data.html
MARKET REPORT
Wednesday, the S&P was up until the Fed minutes were released at 2PM; the S&P 500 finished down 0.4% to 1781 (rounded).
VIX was up a
small amount 0.1% to 13.40.Wednesday, the S&P was up until the Fed minutes were released at 2PM; the S&P 500 finished down 0.4% to 1781 (rounded).
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing was 47% at
the close Wednesday. (A number below 50%
for the 10-day average is generally bad news for the market.)
New-highs equaled new-lows Wednesday, leaving the spread
(new-hi minus new-low) at 0 (it was +37 Tuesday). That’s a negative, but it doesn’t indicate a
particularly bad outcome. Reversals of
this type have been followed by a 3-5% pullback recently.
CORRECTION
Sooner or later we’ll see a bigger pullback; but there is
no indication in the VIX that would show that options players are getting
concerned so my suggestion of a 15% pullback, yesterday, may be too high. At this point, we may (again) be looking at a
smaller correction. So as a guess, perhaps we'll have a 10% drop from the top. We’ll see if the VIX starts moving up enough
to suggest something worse. In the end - this is mostly guesswork based on signals that haven't worked all that well in the QE era.
The 10-day moving average of change in the spread was
minus -15. In other words over the last
10-days, on average, the spread has decreased by 15 each day.
MARKET INTERNALS SUMMARY
The 4-measures of Market Internals that I track for this
indicator were negative at the close today.
So this trend following indicator is negative.
Market Internals are a decent trend-following analysis of current market action, but in 2013 (so far), if I had been buying the positive ratings and selling negative ratings I would have under-performed a buy-and-hold strategy.
NTSM ANALYSIS
Sentiment is EXTREME
negative at 75%-bulls for the 5-day indicator.
All other NTSM indicators are
neutral. Overall, NTSM is neutral. That is a broken record.
(I am mostly out of the market already.)
MY INVESTED POSITION (NO CHANGE)
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.
I still lean toward getting back in, after a pullback, to
speculate on a final ride to the top.
NTSM did give several buy signals over the weeks of 14 and 21 Oct, but
the market just looks too frothy to rush back in…we’ll see if the market will
pullback so I can join the insanity. If
not, cash is fine.
