SMALL BUSINESS SURVEY (d.Short.com)
“The latest issue of the NFIB Small Business Economic Trends is out today [Tuesday]. The June update for May came in at 96.6, up 1.4 points from the previous month's 95.2. Today's headline number marks the third month of improvement. The index is now at the 30.4 percentile in this series and the highest level since September 2007…” Charts and commentary at…
http://www.advisorperspectives.com/dshort/updates/NFIB-Small-Business-Optimism-Index.php
STOCKS ABOVE THEIR 200-dMA (Tuesday Chart)
This statistic is looking a lot better as it now stands at 68%, well
above the 61% that has often led to trouble.
The down trend (Red below), too, is no longer intact. We can also see
that the index has not yet reached the top of the upward channel (in blue) on
the chart below. I expect some pullback
when it gets there. We can guess it will be 2000+ before a pullback starts. 
Chart from...
MARKET REPORT
Wednesday, the S&P 500 was down 0.4% at 1944 (rounded).VIX rose about 5.6% to 11.60. VIX remains at a point that has recently aligned with the start of corrections.
The yield on the 10-year Treasury Note was unchanged at 2.64% at the close.
The Bond Ghouls remain worried.
S&P 500 RELATIVE STRENGTH INDEX (RSI)
RSI (SMA, 14-day) was still high at 87 Wednesday
suggesting an overbought condition.
Overbought conditions can persist, but many put great faith in RSI and
it is a warning that conditions are ripe for a pullback.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing on the NYSE
was 55% at the close Wednesday. (A
number above 50% for the 10-day average is generally good news for the market.)
New-highs outpaced New-lows Wednesday. The spread (new-highs minus new-lows) was +85. (It was +123 Tuesday.) The 10-day moving average of change in the spread was minus 2. In other words, over the last 10-days, on average, the spread has DECREASED by 2 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 Wednesday. Sentiment remained 74%-bulls
(5-dMA of {bulls/(bulls+bears)} for funds invested in selected Rydex/Guggenheim
funds at the close on Tuesday. This value was 85%-bulls on 19 May. Sentiment,
Price, & Volume indicators all remain neutral. The VIX indicator is positive because the VIX
is falling. VIX is actually sending a
mixed signal: falling VIX is good, but the lack of volatility (and fear) is a
negative on the market in the short term.
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.”
