WHY STOCKS HAVEN’T GONE OVER A CLIFF (CNBC)
“…now [12:45pm Tuesday] we're seeing an "oversold bounce." Cashin, UBS' director of floor operations at
the NYSE, told CNBC's Bob Pisani around midday that "the S&P (500
stock index) yesterday got down to the top end of a very important support band
... 1837 to 1841 and it held right in there. And I think that gave people a
little bit of courage."Cashin, however, said there's potential danger on the horizon. "Keep your eye on the yield of the 10-year (U.S. note.) If it suddenly moves sharply lower then something may be going on in the Ukraine." Video at…
http://www.cnbc.com/id/101565281
That 1837-1841 range is the 50-dMA that I mentioned yesterday. Art Cashin mentioned in the video that it was turnaround Tuesday since 10 of the last 14 Tuesday’s had been up. It pays to have a research staff tracking all this stuff.
GET OUT OF STOCKS – DENNIS GARTMAN (CNBC)
“In a reversal of his more bullish take on U.S. equities
in recent weeks, Dennis Gartman said Monday that he's getting out of equities
and sticking with cash and gold to ride out the recent pullback, which he
called a "long-awaited and much-needed correction."… "In a bull
market there are only three positions you can have: Really long, pleasantly
long and neutral. It's time to be neutral. It's still a bull market. You don't
need to be short, but you don't need to be long at this point. I think cash is
the right place to be," he said.” Story and video at…
http://www.cnbc.com/id/101561878Dennis bailed back in January too.
A FINAL TOP SOON? PROBABLY NOT.
I made a similar comment in December 2013, but it’s worth
repeating: “In 2000, the S&P 500 didn’t fall below 1470 (about 4% lower
than the top) and remain lower than 1470 from January until September so it is
quite possible that a top now (if it were to occur) will be prolonged.”
MARKET REPORT
Tuesday, the S&P 500 was up about 0.4% to 1852 (rounded).
VIX was down about 4% to 14.89. The Options boys may be
betting on more upside, but not the Bond Ghouls.The yield on the 10-year Treasury Note moved down, now it’s 2.68%.
During 2013, corrections have stopped at the 50-dMA and
yesterday the market was 0.3% above the 50-dMA.
So the 50-dMA “held” and perhaps we’ll have some more upside. The strong sentiment reading and the reduced
VIX indicate that many are buying the dip. Volume was about average so today's move was not on light volume and that bolsters the bull-argument a little.
There has been late-day selling over the last 3-sessions but
today there was a little late day buying so perhaps the pros are betting on a
bounce too.
Still, this looks like a correction. The S&P 500 has been in the same range
too long so I expect it to resume a downward move, at least to the 200-dMA of
1758. At this point I
won’t try to guess when that move might begin.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing on the NYSE
improved to 54% at the close. (A number above
50% for the 10-day average is generally good news for the market.) Breadth is the only internal that remains
positive.
New-highs outpaced new-lows Tuesday. The spread (new-highs minus new-lows was +18 . (It was +6 Monday). The 10-day moving average
of change in the spread was minus-4. In
other words, over the last 10-days, on average, the spread has decreased by 4 each
day. The smoothed 10-dMA of up-volume fell today. The internals remain neutral.
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 remained HOLD Tuesday. Sentiment was up again to a screaming high 84%-bulls
my highest reading ever (5-dMA of {bulls/(bulls+bears)} for selected Rydex/Guggenheim funds. The VIX,
Price & Volume indicators are neutral. The VIX indicator actually improved
today.
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. Further the 5-10-20 Timer
was positive along with market internals on 26 March as they are today, 28
March. 50% is fully invested for me at
this time.
