“Durable goods orders increased 0.7% in June after
declining a downwardly revised 1.0% (from -0.9%) in May…For the past several
months, manufacturers have stockpiled large amounts of unfilled orders.
Typically, this should bolster production growth. However, manufacturers have
been unwilling to produce out of the backlog.”
Charts and additional commentary at…
https://www.briefing.com/Investor/Calendars/Economic/Releases/durord.htm
CONSENSUS BUILDING FOR 2016 STOCK MARKET BUBBLE, CRASH
(Advisor perspectives)
“The year 2016 will see a number of important events: the
US presidential election, the Summer Olympics, and, according to a growing
number of market analysts, another financial crisis. Why? What’s so special
about 2016? That’s the interesting thing—they all have different reasons.” -
Chris Sheridan, posted at Advisor perspective, dShort.com at…
http://www.advisorperspectives.com/dshort/guest/Cris-Sheridan-140725-Bubble-Consensus.phpThe above article lists a number of gurus all predicting similar crashes. Of course, how many predicted crashes in 2013? And remember, when everyone agrees, something else will happen.
MARKET REPORT
Friday, the S&P 500 was down 0.5% to 1978 (rounded). VIX rose about 7% to 12.69.
The yield on the 10-year Treasury Note fell to 2.47% at the close.
CORRECTION WATCH
(1) No Correction:
The Percentage of Stocks above their 200-dMA was not
available (data is a day late). 61% and
falling is the trouble point for this stat.
RSI is only 50 (70 is overbought).
The S&P 500 was 6.8% above its 200-dMA and didn’t get more than
7.5& above its 200-dMA recently. 10% is the level that frequently indicates
a pullback.
(2) Correction Now:
Market Internals fell to neutral, but were nearly
negative. Statistically, the index is too “quiet” (as it has been since
mid-May) and a pullback is suggested anytime. (By “quiet” I mean that the
day-to-day moves are unusually small.) Chart
wise, the index remains near the top of the 3-month chart, upper trend-line
today (Friday) and the Index is made a double top Thursday. VIX was up 7% Friday. Bonds fell.
That could mean the Index is ready for pullback mode.
Pullback maybe, but at this point a 5% pullback would be
normal.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) fell to 50% at the close Friday. (A number above 50% for the 10-day average is
generally GOOD news for the market.) New-highs outpaced New-lows Friday. The spread (new-highs minus new-lows) was +34.
(It was +164 Thursday.) The 10-day moving average of change in the spread fell
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 the Internals were neutral on the market, but only breadth
kept the internals from a negative reading and then by the slimmest of margins.
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 Friday. Sentiment remained 75%-bulls
(5-dMA of {bulls/(bulls+bears)} for funds invested in selected Rydex/Guggenheim
funds at the close on Thursday (data is a day late). (83% is the current
negative level for the Sentiment indicator.) This value was 85%-bulls on 19
May. Price, Sentiment, Volume & VIX indicators are neutral.
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): HOLD (Earnings announce 31 July)
For my initial discussion see the NTSM blog at:
http://navigatethestockmarket.blogspot.com/2014/05/coppock-curve-says-stock-crash-nowblow.htmlEnsco has surpassed the mean and median analyst price targets so I rate it hold, but the 6% yield is worth owning. Here is a downright negative analysis of Ensco.
ANALYSTS PREDICT ENSCO WILL DISSAPOINT
“…the I/B/E/S consensus estimate has continued to move
lower, in the direction of the SmartEstimate. The consensus estimate is now at
$1.34 per share, down more than 10 cents per share in the last 90 days. The
SmartEstimate is even lower at $1.29. There are three Bold Estimates that are
all significantly below the consensus ($1.25, $1.26 and $1.22). These estimates
are flagged as Bold Estimates because they are by 5-star rated analysts who
have a strong track history. It's one reason why we strongly believe that Ensco
will disappoint…There are now more sell recommendations for Ensco than there
are buy, when the reverse was true 90 days ago. Analysts point to falling
demand coupled with an excess supply of rigs.” Analysis and commentary at…
http://seekingalpha.com/article/2332045-weakness-in-offshore-drilling-may-mean-no-gusher-for-ensco-earningsI remember that there were several insiders that sold about 30-60-days ago. While a single insider sale means little, when several insiders sell it is concerning.
At 54, ESV is at the lower trend line of the chart and any further
decline may be time to leave. I think I might
be able to buy it back at a better price later.
I currently have a 5% gain in the stock, but I may just hold this stock and
collect the dividend – not sure now. The
market was down 0.5% Friday, but ESV was up.
That’s good news.
