“The Thomson Reuters/University of Michigan preliminary index of sentiment climbed to 82.6 this
month from a four-month low of 80 in March….’The confidence that we had going
into 2014 got pushed back a couple months, but now we’re going to see it
blossom in the spring,’ said Jay Morelock, an economist at FTN Financial in New York…’Expectations are high for the second
quarter to really rebound from the first quarter.”' Story at...
http://www.bloomberg.com/news/2014-04-11/michigan-u-s-sentiment-index-increased-to-82-6-in-april-from-80.html
CORRECTION 1742 HERE WE COME
It certainly looks like the
1742 level must be tested, especially since the 50-dMA was taken out decisively
Thursday. While it is possible that the
Index could bounce up from the vicinity of 1790-1800, the lower trend line,
that doesn’t seem likely since the Nasdaq is performing so poorly.
10-YEAR BOND – ART CASHIN
(CNBC)
“…the thing that's troubling to me is take a look at the
10-year. You know, it's gone beyond the short covering and even some of the
flight-to-safety. I mean, we are down at levels that give at least a vague
hint, if not a warning, that the economy may be beginning to sputter in here. So
I think the viewers have to keep watching that 10-year. If it continues to
rally [i.e., yields keep dropping], it's got a stronger signal going on than
perhaps we wanted.” Story and video at…http://video.cnbc.com/gallery/?video=3000266213
Art also said, Watch 4100 on the Nasdaq that could be
trouble and certainly if it breaks 4050.
Then we may get significant selling.
It seems pretty clear that the 10-yr is rising (falling
yield) because of flight to safety.
Investors are leaving the stock market expecting more downside ahead for
stocks.
MARKET REPORT
Friday, the S&P 500 was down about 1% to 1816 (rounded).
VIX was UP about 7.5% to 17.09.
The yield on the 10-year Treasury Note was 2.62% at the close.
The S&P 500 is 1.5% below its 50-dMA and close to the
lower trend line at about 1790-1800. If
the index breaks the trend line I think we can say the correction will begin to
gain traction and fall to the previously mentioned level of 1742.
For all the angst over this current downturn, keep in
mind that the S&P 500 is only down 3.9% below its all-time high. It normal for the Index to trend up and down 5%
as it advances. The concern of course is
the downturn in the Nasdaq. We all
remember 2000 and 2001 as the Nasdaq stocks led the retreat. Once again the Nasdaq has gotten ahead of the
markets, but not nearly as much as it was during the Dot.com bubble.
Friday was not a statically significant day the way I run
the numbers, but a drop of nearly 1% down is often seen as a potential
turn-around point to the upside. Many may bet long on Monday. Another positive for the markets is that Passover
begins Monday and Holidays have a strong upward bias.
The S&P 500 Index is nearing a moment of truth; it either bounces
or enters a real correction.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing on the NYSE
declined to 50% at the close. (A number above
50% for the 10-day average is generally good news for the market.) New-lows outpaced
new-highs Friday. The spread (new-highs
minus new-lows was minus-32. (It was +31
Thursday). The 10-day moving average of change in the spread was minus-9. In other words, over the last 10-days, on
average, the spread has DECREASED by 9 each day. The smoothed 10-dMA of
up-volume turned down Friday too. The
internals finished neutral on the market, but only by the slimmest of margins.
NTSM
The NTSM analytical model for LONG-TERM MONEY remained
HOLD Friday. Sentiment was a screaming
high 84%-bulls (5-dMA of {bulls/(bulls+bears)} for funds invested in selected
Rydex/Guggenheim funds. The VIX, Price & Volume indicators are all neutral,
but just barely.
