“…The Bureau of Labor Statistics Friday morning…Non-farm
payrolls added 217,000 jobs in May, slightly above the 215,000 that economists
were expecting….Ron Sanchez, executive vice president and chief investment
officer at Fiduciary Trust (a Franklin Templeton company) said in a phone
interview Friday that while not as robust as many economists would like to see,
the results are positive because of the stability and consistency they show in
the labor market.” Story at…
http://www.forbes.com/sites/maggiemcgrath/2014/06/06/jobs-report-u-s-economy-added-217k-jobs-in-may-unemployment-remains-unchanged-at-6-3/For a detailed discussion of the jobs numbers see Mike Shedlock’s Blog at…
http://globaleconomicanalysis.blogspot.com/
VIX
VIX is a big story now. Today the VIX dropped 8% (to 10.73) and is now down 22%
on the year. Several experts have predicted
that a fall below 10 would foreshadow a major turn on the markets: Think 2007.
Even recent VIX excursions below 12 have been a precursor to corrections,
albeit small. Now that the ECB has gone
to NIRP (Negative Interest Rate Policy rather than the zero policy here in the
US) one must wonder whether there will ever be another market drop.
RALPH ACAMPORA ON CNBC
Ralph Acampora is now bullish again. He said, “The concerns I had are
evaporating.” I remember Ralph from 2000 as a perma-bull who was nick-named,
Ralph “I-can-make-you-poorer.” Let’s
hope he is right this time. I am
actually getting more concerned, but until I see other investors more worried
(and I’ll see that in NTSM indicators) I’ll remain fully invested. I’m guessing
the S&P 500 can climb at least another 2% or so.
MARKET REPORT
Friday, the S&P 500 was up about 0.5% to 1949 (rounded).
VIX fell about 8% to 10.73. VIX remains at a point that
has recently aligned with the start of corrections.
The yield on the 10-year Treasury Note rose slightly to 2.59%
at the close.
The Bond Ghouls remain worried.
RELATIVE STRENGTH INDEX (RSI)
RSI remained a high 85 Friday suggesting an overbought condition. Overbought conditions can persist, but many
put great faith in RSI and it is calling for a pullback.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing on the NYSE
rose to 60% at the close Friday. (A
number above 50% for the 10-day average is generally good news for the market.)
{As a point of interest (not a prediction) the 2010 value right before a 16% correction
was 59%. Whether this turns out to be a
similar “too much of a good thing” remains to be seen.}
New-highs outpaced New-lows Friday. The spread (new-highs minus new-lows) was +345.
(It was +277 Thursday.) The 10-day moving average of change in the spread was +25.
In other words, over the last 10-days,
on average, the spread has INCREASED by 25 each day. The smoothed 10-dMA of up-volume
was UP today and internals are positive on the market.
NTSM
The NTSM analytical model for LONG-TERM MONEY remained
HOLD Friday. Sentiment remained 74%-bulls
(5-dMA of {bulls/(bulls+bears)} for funds invested in selected Rydex/Guggenheim
funds at the close on Thursday. This value was 85%-bulls on 19 May. Sentiment,
Price, Volume & VIX indicators all remain neutral.
MY INVESTED POSITION
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
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…
http://www.streetinsider.com/Upgrades/BMO+Capital+Upgrades+Tesaro+(TSRO)+to+Outperform/9071511.html
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.”
