The latest Job Openings and Labor Turnover Survey, or
JOLTS, showed job openings surged to 4.635 million in May…Last month's report showed that total job
openings in April totaled 4.455 million, up from 4.166 million the prior month… Peter Tchir at Brean
Capital said of the report, "A very strong number. This is
one Yellen told us to watch. You have to go back to June 2007 to get a better
number." Story at…
http://www.businessinsider.com/jolts-survey-for-may-july-8-2014-7
DENNIS GARTMAN OUT AGAIN (CNBC)
"There were a number of things that made me say
'It's probably a good idea to go on the sidelines,' Gartman said on CNBC's ‘Fast Money.’ Gartman cited two main factors
that he noticed in the past week that caused him to take his money out of
stocks. The first factor dealt with valuation…Gartman also said that last
week's strong employment numbers could give traders the notion that the Fed
might tighten its monetary easing policy sooner than expected.” Story at…http://www.cnbc.com/id/101817271
BULL MARKET IN FINAL STAGE (CNBC)
“If the life cycle of a bull market can be divided into
four stages—pessimism, skepticism, optimism and euphoria—investors might be
looking at its final stage, Ed Yardeni said Tuesday. ‘I don't trade this thing
on a short-term basis. I do like to look at the trend, and I think we may very
well be in the fourth phase,’ the chief investment strategist for Yardeni Research
said on CNBC's "Halftime Report." Story and Video at…http://www.cnbc.com/id/101820092
MARKET REPORT
Tuesday, the S&P 500 was
down 0.7% to 1964 (rounded). VIX rose about 6% to 12.05.
The yield on the 10-year Treasury Note was down to 2.56% at the close. The Bond Ghouls showed concern today.
Today was a statistically-significant day in my analysis
and that is usually followed by a reversal in direction the next day (62% of
the time), so Wednesday would be slightly more inclined to be an up-day.
CORRECTION WATCH – CLUES BOTH WAYS
No Correction: The Percentage of Stocks above their
200-dMA was 68% Monday (data is a day late); 61% is the trouble point for that
stat. The S&P 500 is 7.1% above the
200-dMA and 10% above the 200-day is the trouble point for that one. Sentiment
is 79%-bulls and this indicator will switch to negative at 83%. (None of this guarantees that a correction isn’t
already underway. RSI declined to a neutral 63. {70 is overbought}, but that doesn’t
mean much at this point. The overbought
signal already occurred.)
Correction Now: VIX rose sharply again, so the options
boys are worried. Chart wise, the index is at the top of the 3-month chart
upper trend line and that is often a point where there are reversals. It is also
near the top of the 1-year chart upper trend line. Statistically, the index is
too “quiet” (as it has been since mid-May) and a pullback is suggested by that
stat too. The Internals continue to
deteriorate and are almost negative Tuesday.
If the Internals go negative, I think we’ll see about a
5% pullback and perhaps more. History
says a bigger correction is due. The next day or two will give more clues whether there will be a pullback or not.
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 +39.
(It was +79 Monday.) The 10-day moving average of change in the spread rose
slightly to minus-18. In other words, over the last 10-days, on
average, the spread has DECREASED by 18 each day. The smoothed 10-dMA of up-volume
was DOWN today and the Internals remained neutral on the market. Only the 10-dMA of percentage of stocks
advancing kept the internals from flashing a negative.
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 slipped to 79%-bulls (5-dMA of {bulls/(bulls+bears)} for funds invested in selected Rydex/Guggenheim funds at the close on Tuesday (data is a day late). (83% is the negative level for the Sentiment indicator.) This value was 85%-bulls on 19 May. Sentiment, Price, Volume & VIX indicators are all 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): HOLD (Earnings announce 28 July)
For my initial discussion see the NTSM blog at:
http://navigatethestockmarket.blogspot.com/2014/05/coppock-curve-says-stock-crash-nowblow.html
Ensco has surpassed the mean and median analyst price targets. As of Monday it is 55.57 so time to get more cautious.
WHY ENSCO IS A GREAT DIVIDEND BUY (Seeking Alpha)
“Ensco will benefit from the rising prices of oil and
natural gas…Ensco is increasing its ultra-deepwater rigs fleet; three new
drillships will be delivered this year and in 2015…Ensco’s dividend yield is
very high at 5.48%, and the annual rate of dividend growth over the past three
years was also very high at 27.7%...Ensco is ranked second among all S&P
500 energy stocks according to the powerful ranking system "All-Stars:
Buffett."
