“Industrial production increased 0.6% in May following an upwardly revised 0.3% decline (from -0.6%) for April. The Briefing.com consensus expected industrial production to increase 0.5%...After an unexpected decline in April, manufacturing production growth returns to a positive trend.” Details and charts at…
https://www.briefing.com/Investor/Calendars/Economic/Releases/indprd.htm
DOUG SHORT UPDATES THE BIG FOUR ECONOMIC INDICATORS (Advisor Perspectives)
“The overall picture of the US economy had been one of a ploddingly slow recovery from the Great Recession, and the data for December and January months documented a sharp contraction. The recovery in February and March appeared to support the general view that severe winter weather was responsible for the contraction and that it was not the beginnings of a business cycle decline. Today's industrial Production has strengthened the optimistic view.” – Doug Short. Detailed commentary, analysis and charts at…
http://www.advisorperspectives.com/dshort/updates/Big-Four-Economic-Indicators.php
THE VIEW FROM HUSSMAN (Hussman Funds)
“…the recent period has created a misperception that
monetary easing itself will support financial markets regardless of their
valuation. The error here is that we know from history that it does not.
Indeed, the 2000-2002 and 2007-2009 collapses both progressed in an environment
of aggressive and sustained monetary easing. What’s actually true about
monetary policy is that zero-interest rate policy has created a perception that investors have no
alternative but to “reach for yield” in riskier assets. It’s entirely that reach for yield that
investors must rely on continuing indefinitely, because there’s no mechanistic cause-effect relationship
between the Fed balance sheet and stock prices, bank lending, or economic
activity….In short, investors who are reaching for yield in stocks as an
alternative to risk-free assets are most likely reaching for a negative total return in stocks
between now and about 2021.” - John
Hussman, PhD. Excerpted from the Weekly
Market Commentary from Hussman Funds at…
http://www.hussmanfunds.com/wmc/wmc140616.htmSTOCKS ABOVE THEIR 200-dMA (Friday’s Data)
This statistic was 64% on Friday and that’s above the 61% value that has
often led to trouble for the markets in the past. This chart will be updated to today’s value
later tonight. Chart available at…
http://www.indexindicators.com/charts/nyse-vs-nyse-stocks-above-200d-sma-params-3y-x-x-x/MARKET REPORT
Monday, the S&P 500 was up about 0.1% to 1938 (rounded).
VIX rose about 4% to 12.65.
The yield on the 10-year Treasury Note remained unchanged at 2.60% at the close.
The Bond Ghouls remain worried.
S&P 500 RELATIVE STRENGTH INDEX (RSI)
RSI (SMA, 14-day) pulled back to 68 Monday suggesting a near
overbought condition, but near is not there (70 is overbought) so the RSI in
neutral territory today.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing on the NYSE
remained 53% at the close Monday. (A
number above 50% for the 10-day average is generally good news for the market.)
New-highs outpaced New-lows Monday. The spread (new-highs minus new-lows) was +143.
(It was +78 Friday.) The 10-day moving average of change in the spread rose to minus
5. In other words, over the last 10-days, on
average, the spread has DECREASED by 5 each day. The smoothed 10-dMA of up-volume
was DOWN today and internals remained Neutral on the market.
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 for LONG-TERM MONEY remained HOLD Monday. Sentiment rose to 77%-bulls (5-dMA of {bulls/(bulls+bears)} for funds invested in selected Rydex/Guggenheim funds at the close on Thursday. (I’m always a day late on this stat because it isn’t available until later tonight.) This value was 85%-bulls on 19 May. Sentiment, Volume & VIX indicators are all neutral. The Price indicator remains positive because up moves have been larger than down moves recently.
I increased my stock allocation to 50% invested in stocks on 26 March because of the NTSM indicators turned positive 24 Mar at the close. 50% in stocks is fully invested for me, given my age (semi-retired) and the risk inherent in today’s stock market. I am watching closely to see if it is time to reduce my long-term stock holdings.
--INDIVIDUAL STOCKS--
ENSCO (ESV): BUY (Earnings announce 28 July)
The chart looks OK with higher lows and it made a higher high on the
1-month chart so I again rate ESV as BUY. It doesn’t hurt that it was upgraded
to Buy on 27 May by The Street.com. For my initial discussion see the NTSM blog at:
http://navigatethestockmarket.blogspot.com/2014/05/coppock-curve-says-stock-crash-nowblow.htmlENSCO benefited from an upgrade of Diamond Offshore 29 May by Morgan Stanley. Morgan Stanley upgraded Diamond Offshore to equal weight. They said, “Our Underweight thesis based on significant negative earnings revisions has largely played out. We also believe that the cycle is turning and that floater availability has peaked.”
TESARO (TSRO): BUY
For my initial discussion see the NTSM blog at:
http://navigatethestockmarket.blogspot.com/2014/05/gdp-contractsjobless-claims.html
[28 May 2014] BMO Capital upgraded Tesaro (NASDAQ: TSRO) from Market Perform to Outperform with a price target of $46.00. Posted at…
Research has shown that to have a diversified portfolio no one stock should be more than 4% of the portfolio total, or stated another way, if your total portfolio consisted of individual stocks, you would need at least 25-stocks to be “diversified.”
