“Consumer confidence jumped in March as people were more upbeat about future job prospects.
The Conference
Board Consumer Confidence Index rose to 82.3, up from 78.3 in February. It's
the first reading above 82 since last June, and the highest reading since January
2008…Consumers are demonstrating more optimism about the economy and future job
prospects, which will be reflected in their spring shopping..” Story at…
http://www.usatoday.com/story/money/business/2014/03/25/consumer-confidence-index-march/6831621/THE 50-dMA
Here we go again – the S&P 500 got as close as 0.7% above the 50-day moving average on 14 March and once again, the S&P 500 seems to have bounced up. In my view, market internals are the key for the short term trend and they are now just barely, a whisker short of a buy.
WHY I HATE ALL POLITICIANS – REASON 8,027
“When George W. Bush was president, 61 percent of Democrats considered NSA surveillance to be ‘unacceptable’, but now that Obama is in the White House, only 34 percent of them consider it to be ‘unacceptable’”. Commentary at…
http://www.zerohedge.com/news/2014-03-24/30-survey-results-sound-false-are-actually-true
Don’t think this kind of thinking is reserved to the Democrats. The Republicans are now deficit hawks. Where were they when Bush was running-up huge deficits by increasing spending and cutting taxes?
MISH’S TAKE ON UKRAINE (Global Economic Perspective)
Here’s an excerpt from GEP: “The US fomented a coup of freely-elected Viktor Yanukovych and now does not like the result. Crimea did not like the result either. Crimea leaders defected and held a vote. Crimea returns to Russia and it never should have been given to Ukraine in the first place. This is what happens when you meddle in the internal affairs of other countries. S*** happens, and the US is to blame.” – Mich Shedlock. Commentary at…
http://globaleconomicanalysis.blogspot.com/2014/03/was-russias-annexation-of-crimea.html
This story is based on the writings of Paul Craig Roberts who is to the right of Senator Joseph McCarthy and Attila the Hun. I am skeptical of his claim that the US was able to bring about overthrow of Ukraine; but it is not outside the realm of possibility that we supported the wrong side in one way or another. We have meddled in internal politics of countries in the past, often with poor results. Those guys on Star Trek had a good idea with the Prime Directive.
MARKET REPORT
Tuesday, the S&P 500 was up about 0.4% to 1866 (rounded).
VIX fell about 7% to 14.02.
The yield on the 10-year Treasury Note rose slightly to 2.75%.
The S&P 500 chart shows the current value of the index close to its upper trend line and 7% above the 200-dMA. In other words the index doesn’t have too far to go before it runs into significant resistance. Still, I am resigned to following the indicators and they are now positive.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing on the NYSE rose to 53% at the close. (A number above 50% for the 10-day average is generally good news for the market.) In addition, the trend of the 10-day, %-advancing reversed upward. New-highs outpaced new-lows Tuesday. The spread (new-highs minus new-lows was +62. (It was +44 Monday). The 10-day moving average of change in the spread was minus-1. In other words, over the last 10-days, on average, the spread has decreased by 1 each day. The smoothed 10-dMA of up-volume continued up today. The internals are neutral on the market, but couldn’t be any closer to a buy. At -1, the 10-dMA of the change is spread is the only internal holding back the train.
Market Internals are a decent trend-following analysis of
current market action, but should not be used alone for short term trading.
They are usually right, but they are often late. They are most useful when they diverge from
the Index. In 2013, using these
internals alone would have made a 16% return vs. 30% for the S&P 500 (in on
Positive out on Negative – no shorting).
Of course, few trend-following systems will do well in an extreme
low-volatility, straight-up year like 2013.
NTSM
The NTSM analytical model was HOLD today, Tuesday. The Price indicator is positive, because up
moves have been bigger than down moves recently. Price, Volume and VIX
indicators are all neutral. Sentiment was
neutral at the close last night, but just barely, but that means that the NTSM
system was actually a buy yesterday, because VIX and Price were positive
yesterday. (Since sentiment data is late, I am always a day behind on the
Sentiment.) So, since NTSM was BUY yesterday and the Internals are as close as they could be to a buy, I am upping my stock allocation to 50% tomorrow. Buying now isn’t the best feeling since the markets are nearing all-time highs again. I will buy unless: (1) tomorrow is a huge up day (indicating a possible reversal); (2) tomorrow is a huge down day indicating new fear in the market. "Huge" is a greater than 1% move either way. I could always chicken out if there is bad news too.
I’ll post again around 11:30AM my final decision, but barring a big move either way, I’ll reset my stock allocation to 50%-stocks. The scary part is that the markets could always turn down and I could be whipsawed out of the markets, but that is always a risk. Right now, most market participants seem to want IN, not OUT.
I reduced to 30% invested in stocks because of the NTSM sell signal on 13 March. I will return to 50%-stock allocation tomorrow, 26 March, since the Market Internals are a whisker from a BUY and the NTSM indicators turned positive Monday at the close. I just didn’t know it (until Tuesday) because the sentiment values are not published until after I publish the Blog.
