“Wall Street markets were higher in afternoon trading on Wednesday after the Federal Reservce concluded a two-day meeting with a statement affirming its commitment to its stimulus campaign.” Story at…
http://www.nytimes.com/2014/09/18/business/daily-stock-market-activity.html
FED AFFIRMS STIMULUS (NY Times)
“The Federal Reserve affirmed its commitment to its
stimulus campaign Wednesday, rejecting the argument it should begin to pull
back more quickly, even as it detailed plans for its eventual retreat. The Fed, in a statement released after a two-day meeting
of its policy-making committee, said that the economy continued to improve, but
that the central bank’s help is still needed because too many people are unable
to find jobs” Story at…http://www.nytimes.com/2014/09/18/business/economy/federal-reserve-policy-statement-yellen.html?rref=business&module=Ribbon&version=context®ion=Header&action=click&contentCollection=Business%20Day&pgtype=article
CONSUMER PRICE INDEX FALLS (Business Insider)
“The consumer price index fell by 0.2%, which compares to
the 0.0% expected by economists. This is the first decline
since April 2013…this gives the Federal Reserve flexibility to keep monetary policy easy and interest rates
low for a long time.” Story at…http://www.businessinsider.com/cpi-august-2014-2014-9
Gasoline prices have been falling and that’s good.
Wednesday, the S&P 500 was up about 0.1% to 2002 (rounded).
VIX was down about 0.6% to 12.65.The yield on the 10-year Treasury Note rose to 2.62% at the close.
RISING RATES NOT GOOD FOR THE S&P 500 (Yahoo Finance)
“‘We certainly do expect rates to move higher, and as it
relates to equities, this is a negative for equities in the short term,’ said
Erin Gibbs, equity chief investment officer at S&P Capital IQ.” Story at…http://finance.yahoo.com/blogs/talking-numbers/the-most-surprising-trade-of-the-year-is-finally-turning-around-213951126.html
Rising rates are strengthening the dollar and that will pressure multi-national companies.
STATISTICALLY SIGNIFICANT DAY – SUGGESTED A DOWN DAY
WEDNESDAY
Tuesday was statistically-significant in my system and
that suggested a down day today. That
didn’t work out; Wednesday was up, but just barely. There may be some carryover later. The Pros
have been taking profits for about a week as indicated by late day selling. The market faded down today late.
CORRECTION SOON? MIXED SIGNALS
The daily up/down moves in the market continue to be
abnormally small and that usually leads to a pullback of some kind. This trend
is suggesting a pullback/correction. On the other hand, new-high/new-low data
reversed and new-highs exceeded new lows Wednesday. Breadth is improving and
the percentage of stocks in the NYSE above their 200-dMA was up to 55% as of
Tuesday's close – it was 53% Monday (data is a day late). The trouble point for
this stat is 62% so this is not out of the trouble zone, but it is moving
up. This is a measurement of breadth so
with our breadth measurement (%-advancing) moving up too, the pullback that
looked imminent a few days ago, may be postponed. Let's see what happens
tomorrow.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) rose to 43% at the close Wednesday.
(A number below 50% for the 10-day average is generally BAD news for the
market. The average in a normally rising
market is 53%.) New-highs outpaced New-lows Wednesday. The spread (new-highs minus new-lows) was +25.
(It was -30 Tuesday). The 10-day moving average of change in the spread rose to
minus-13. In other words, over the last 10-days, on average, the spread has
decreased by 13 each day. The smoothed 10-dMA
of Up-Volume is advancing so the internals remained neutral.
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
Wednesday, the NTSM is HOLD. The volume indicator is Positive. All other
indicators are neutral.
I made a BUY call on Monday, 18 August 2014 because the charts were looking better; therefore, I upped my invested percentage to 50% invested in stocks on Tuesday 19 August. The 5-10-20 Timer and Market Internals both gave positive signals on 19 August confirming the previous day’s Buy signal. 50% is Fully invested for me since I am semi-retired.
--INDIVIDUAL STOCKS FROM A VALUE HOUND--
ENSCO (ESV): BUY
For my initial discussion see the NTSM blog at:
http://navigatethestockmarket.blogspot.com/2014/05/coppock-curve-says-stock-crash-nowblow.html
Dividend is 6%. PE is 8.5 so downside is limited.
“Ensco attracts heavy call buying…” (Yahoo Finance) 9/8/2014
http://finance.yahoo.com/news/ensco-attracts-heavy-call-buying-104523422.html
“All of the drillers are getting killed. I'd stick with Ensco International (ESV)." – Jim Cramer, Mad Money. 9/11/2014
