“Officially, analyst consensus for profits is dismal—a
loss of 0.13 percent for the S&P 500,
against a projected revenue gain of about 3 percent, excluding financials, a
sector expected to see a drop of 7.8 percent, according to S&P Capital IQ. Neither figure is anything to get particularly excited
about, but the revenue number, and the full-year projection for a 4 percent
gain, would represent a substantial increase from 2013's anemic 1.1 percent
growth…"If you have a slowdown or further decline, if the next quarter
doesn't come in at 8 or almost 9 percent where expectations are now, I think
that's troublesome," Mike Thompson, head of global markets intelligence at
S&P Capital IQ, said during a CNBC interview. "Of the handful of
companies that have reported so far, a lot of guys have missed, and that's a
little disconcerting." Story and video at…
http://www.cnbc.com/id/101573833
SELLING IS STARTING TO GET SERIOUS (Prudent Bear)
So I’m seeing significant confirmation of the bearish
thesis – fundamentally and more recently in the marketplace…I do see
an unfolding backdrop conducive to one tough bear market. Everyone got silly
bullish in the face of very serious domestic and global issues. Global
securities markets are a problematic “crowded trade.” Marc Faber commented that
a 2014 crash could be even worse than 1987. To be sure, today’s incredible
backdrop with Trillions upon Trillions of hedge funds, ETFs, derivatives and
the like make 1987 portfolio insurance look like itsy bitsy little peanuts. So
there are at this point rather conspicuous reasons why Financial Stability has
always been and must remain a central bank’s number one priority (whether Dr.
Evans appreciates this or not). Just how in the devil was this ever lost on
contemporary central bankers?” Commentary at….
http://www.prudentbear.com/2014/04/financial-stability.html#.U0l8vBCna-Q
Of course opinions are all over
the place when the markets are in turmoil.
Here’s an opposite view…
NOT A BEAR MARKET START (Yahoo
Finance)
"To a great degree what we've seen is high-growth
momentum stocks reversing direction," Tobias Levkovich, chief equity
strategist at Citigroup...He thinks people have misinterpreted the selling,
saying investors are moving from small to large-cap stocks, from growth to
value and toward quality. Levkovich says what we are seeing is "discreet
parts of the market" like biotech, social media and cloud computing
"start to lose what had been a small little bubble forming"…He
doesn't think we're going to see this horrible correction -- he thinks this
will remain more "discreet," but says 5% to 10% would be normal,
healthy and cleansing -- and he's expecting that in the first half of this
year. He says he doesn't expect a bear market, though.” Story and video at…
http://finance.yahoo.com/blogs/daily-ticker/this-is-not-the-start-of-a-bear-market--citi-strategist-113515028.html
MARKET REPORT
Monday, the S&P 500 was up about 0.8% to 1831 (rounded).
VIX was DOWN about 5.4% to 16.11. The yield on the 10-year Treasury Note was up slightly to 2.65% at the close.
The news of the day for me was that there was a very
strong last hour of trading. The S&P
500 gained nearly 8 points late in the day.
That suggests the pros think the downturn is over (or at least delayed a
bit).
I know there was a comment last week that the falling
10-yr bond rate was a sign that investors might be getting concerned about
recession. As I see it, investors are
signaling they have NO concern about a recession since the Morgan Stanley cyclical
index is outperforming the S&P 500 on every time frame from 2-weeks out to
1-year. If investors were expecting a
recession, cyclical stocks would not be as popular.
The S&P 500 was 1.5% below its 50-dMA at the close on
Friday, but the lower trend line was not taken out. The index finished about 0.8% below the
50-dMA Monday.
If the Index can climb significantly above 1850 (or so)
it will show that the market is stronger than most think.
I think the upper trend line (now downward sloping) is around 1850. If the Index has a statistically significant
day (more than a 1% gain) and finishes at the upper trend line, this could be a
good point to short the market for those inclined. If it breaks up more than just a tiny bit on
the next day – cover the short. (I don’t
have time to give too much advice on short-term timing and further, I’m now
very selective about when I take a trading position. I will include it in the blog if I take a
short position on the set-up previously described, if it does occur.) My guess is that the Index will climb, but fail
to get above its upper trend line. Time
will tell…
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing on the NYSE
declined to 49% at the close. (A number below
50% for the 10-day average is generally bad news for the market.) New-highs
outpaced new-lows Monday. The spread
(new-highs minus new-lows was +13. (It
was -32 Friday). The 10-day moving average of change in the spread was minus-12.
In other words, over the last 10-days,
on average, the spread has DECREASED by 12 each day. The smoothed 10-dMA of
up-volume turned down Friday and continued down Monday. The internals finished negative on the market.
NTSM
The NTSM analytical model for LONG-TERM MONEY remained
HOLD Monday. Sentiment was a screaming
high 83%-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.
MY INVESTED POSITION
I increased my stock allocation to 50% invested in stocks
on 26 March because of the NTSM indicators turned positive Monday (24 Mar) at
the close. I am watching closely to see
if it is time to reduce my long-term stock holdings. An NTSM sell-signal along
with a break of the trend line would convince me.
