“The Commerce Department said on Tuesday sales surged 18.6 percent to a seasonally adjusted annual rate of 504,000 units. That was the highest level since May 2008, while the increase was the biggest since January 1992.” Story at…
http://www.cnbc.com/id/101784418
FED’S PLOSSER: RATES MAY RISE SOONER (CNBC)
“The U.S. economy is approaching the Fed's economic targets faster than expected and might push the central bank to accelerate plans to increase interest rates, Philadelphia Federal Reserve Bank President Charles Plosser said on Tuesday…Using different variations of what is known as the Taylor Rule, for example, Plosser said the current economic projections of Fed officials would produce a target interest rate of anywhere from 1.5 percent to as much as 4 percent by the end of next year—higher than that currently expected by most policymakers. Depending on economic conditions, the appropriate rate could even be as much as 4.7 percent.” Story at…
http://www.cnbc.com/id/101783800
PAULSON WARNS OF ECONOMIC CRISIS FROM GLOBAL WARMING (Yahoo Finance)
“Former Treasury Secretary Hank Paulson argues in a NYT editorial there will be serious consequences -- both economically and environmentally -- if U.S. lawmakers continue to underestimate the "climate bubble." He writes:
"For too many years, we failed to rein in the
excesses building up in the nation’s financial markets. When the credit bubble
burst in 2008, the damage was devastating. Millions suffered. Many still do.
We’re making the same mistake today with climate change. We’re staring down a
climate bubble that poses enormous risks to both our environment and economy. The
warning signs are clear and growing more urgent as the risks go
unchecked." Story at…
http://finance.yahoo.com/blogs/daily-ticker/is-climate-change-the-next-financial-crisis-131808333.htmlCMT: Paulsen is a Republican so this is interesting. Global warming has become such a partisan issue that it is difficult to read/hear any constructive conversation on the subject. The reason for this is that all sides are lying by exaggeration; Al Gore, Rush Limbaugh, and almost anyone you can find. The truth is the Earth is warming. That seems simple enough; the last ice age was 12000 years ago, more or less. The catch is that even the recent warming trend is a straight line trend not the parabolic upward curve the alarmists (and their computer programs) predict. Over the past 20-years computer projections have consistently over estimated the warming. As a result, many who dispute man-made warming focus on the bad projections and ignore several simple facts. The earth is warming at a rate that very closely matches the rate of increase in atmospheric CO2, so it would seem that there is a human component. The effect of CO2 on climate is well understood, based on studies of Venus. All reputable scientists would agree that CO2 causes warming. After that, there is no consensus about what could be done, or should be done. For part of the reason, let’s look at the US role.
The US produces 16% of the
world’s CO2 while China produces 29%. It
seems there would be little impact if even if the US were to eliminate CO2, an
obvious impossibility. On a per capita
basis, the US is the World’s leader (behind Qatar) pumping out 3-times the CO2
as China so there is an argument on the other side too. Is there anything to
do?
Let’s assume there is a
calamity on the way that the world could avoid.
I see little to be gained by unilaterally cutting emissions (thereby
increasing the costs of US goods and services) thus giving developing nations (including China)
an economic advantage to take more of our jobs.
The world must agree to tackle the problem and so far they haven’t. Here’s a further
discussion from Mish Shedlock…http://globaleconomicanalysis.blogspot.com/
MARKET REPORT
Tuesday, the S&P 500 was down 0.6% to 1950 (rounded).
VIX rose about 10% to 12.13. The options boys got worried
today.
he yield on the 10-year Treasury Note fell to 2.58% at
the close. So did the Bond Ghouls.
CORRECTION ALERT
Tuesday was a statistically significant down-day since it
exceeded my price and volume statistical parameters. This would usually (about 62% of the time) be
followed by (correction of typo) UP-day on Wednesday. (The move after a statistically significant day is in the opposite direction of the statistically significant move.) RSI
fell to a neutral 62.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) fell to 52% at the close Tuesday. (A number above 50% for the 10-day average is
generally good news for the market.)
New-highs outpaced New-lows Tuesday. The spread (new-highs minus new-lows) was +154.
(It was +218 Monday.) The 10-day moving average of change in the spread rose to
+3. In other words, over the last 10-days, on
average, the spread has INCREASED by 3 each day. The smoothed 10-dMA of up-volume
was DOWN today. 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 Tuesday. Sentiment remained 72%-bulls
(5-dMA of {bulls/(bulls+bears)} for funds invested in selected Rydex/Guggenheim
funds at the close on Monday. 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.
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 (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.htmlTESARO (TSRO): SELL
Tesaro was down more than 6% over the past 2-days, so I decided to sell Tuesday, as I had posted earlier. Tesaro gave results on some of their drug trials Monday and there was enough selling afterward to scare me out. I’d rather take my 9% gain than wait. I am not patient when it comes to individual stocks especially those with no earnings.
