“To try to control the Ebola epidemic spreading through West Africa, Liberia has quarantined remote villages at the epicenter of the virus, evoking the "plague villages" of medieval Europe that were shut off from the outside world. With few food and medical supplies getting in, many abandoned villagers face a stark choice: stay where they are and risk death or skip quarantine, spreading the infection further in a country ill-equipped to cope…Ebola has killed at least 1,145 people in four African nations…The Italian roots of the word quarantine - meaning 40 days - refers to the isolation period for ships arriving into Venice from plague regions. But Liberia's operation could go on for three months or more, creating the need for a long-term plan.” Story at…
http://www.reuters.com/article/2014/08/17/us-health-ebola-liberia-insight-idUSKBN0GH0EY20140817
The disease is carried by African bats so it is unlikely to be a serious world threat.
MARKET REPORT
Monday, the S&P 500 was UP
0.85 % to 1972 (rounded). VIX fell about 6% to 12.32.
The yield on the 10-year Treasury Note was up some to 2.39% at the close; the bond Ghouls remain worried.
STOCKS ABOVE THEIR 200 DAY MOVING AVERAGE
The percent of stocks on the NYSE above their 200-dMA
remained 54% Friday (data is a day late).
61% is the trouble point for this stat. 61% is the mean and I think that
is over the past 3-years. So if the mean
is 61% in a normally rising market, a value of 54% is not a good number, but the chart now has bottomed and is rising
sharply so I’ll discount this stat.
Chart at…http://www.indexindicators.com/charts/nyse-vs-nyse-stocks-above-200d-sma-params-3y-x-x-x/
RSI
RSI was neutral at 51 as of Friday. Oversold is below
30. Overbought is above 70.
CORRECTION OVER?
It appears that it may be, at least the downtrend has
been broken (as shown in the chart below) so I will move back in the market
Tuesday. The Index will, of course, need to get past prior highs at 1991 or it
will make a triple-top and that would be rather ominous.
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
I said Friday, “If
the S&P 500 can close significantly above 1955, I’ll be a buyer” and so
I will be. I rate the Index a BUY at
this point. That is based on the chart
above rather than my usual basket of indicators. The indicators are all neutral, but Sentiment
has pulled back to 71%-Bulls (down from 85% in May) and that should give the
market a little running room. Still this
is no slam dunk and I may be whip-sawed out again later…we’ll see.
MY INVESTED POSITION
I reduced my investment in stocks to 30% on 1 August because
of the NTSM indicators turned negative at the close on 31 July. As of Monday, 17 August, the charts are
looking better so I will up my invested percentage to 50% in stocks.--INDIVIDUAL STOCKS FROM A VALUE HOUND--
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.html
