“On Friday, the Bureau of Economic Analysis released its third estimate of real gross domestic product for the second quarter of 2014 — covering April, May and June of this year. The release showed output in the U.S. increasing at an annual rate of 4.6%. This is relative to the first quarter when real GDP declined a sharp 2.1%.” Story at…
http://www.forbes.com/sites/samanthasharf/2014/09/26/u-s-gdp-grew-4-6-in-second-quarter-2014-up-from-earlier-estimates/
CONSUMER SENTIMENT UP (Reuters)
“The Thomson Reuters/University of Michigan's final
September reading on the overall index on consumer sentiment finished at 84.6,
the highest since July 2013, up from 82.5 at the end of August.” Story at…http://www.reuters.com/article/2014/09/26/us-usa-economy-consumersentiment-idUSKCN0HL1LO20140926
ART CASHIN ON THE SELLOFF (CNBC) 25 Sept 2014
“Veteran
trader Art Cashin said that the market is experiencing a broad selloff, but the
cause is not immediately clear. Cashin, director of floor operations at
the NYSE for UBS, told CNBC on Thursday that it is the riskier elements of the
market that are being hit now, and he weighed whether this could be the start
of something big. "Rumor-mongers are out and about so the viewers should
be careful," Cashin warned, adding that "it's clearly rather heavy
selling...there's nothing narrow about this selloff." Story at…
http://www.cnbc.com/id/102033161
PUTIN’S SANCTIONS CAUSING HARM TO RUSSIANS – NOT
AMERICANS(CNBC)
“Putin's move in early August
to block American chickens has backfired…The [Russian] central bank
governor, Elvira Nabiullina, said on Thursday
that inflation could exceed 7.5 percent this year "and may be even
higher." The central bank has directly implicated sanctions against food
imports for that rise.” Story at…http://www.cnbc.com/id/102030391
DOLLAR STRENGTH (Businessweek)
“The dollar rose to a four-year high as Goldman Sachs
Group Inc., Morgan Stanley and Bank of America Corp. forecast further strength
amid bets the Federal Reserve will raise interest rates before its peers do.”
Story at…http://www.businessweek.com/news/2014-09-24/euro-trades-near-14-month-low-before-draghi-speaks-aussie-drops
DOLLAR STRENGTH IS TROUBLE FOR THE MARKETS
Foreign investors have been a major reason for the stock market’s extraordinary run. As the dollar strengthens against other currencies, those foreigners who sell US stocks will be paid back with less money when the dollar is converted back to their currency. This is probably a downward pressure on US markets. A strong dollar also directly impacts earnings of multi-national companies and that is another negative.
SENTIMENT
Sentiment was 73%-Bulls at the high 6-days ago. (Measured
as %-Bulls {Bulls/(Bulls+Bears)} in selected Rydex/Guggenheim Funds.) 5-trading
days later (Thursday) the %-bulls value was up to 75%. This is surprising
because it means that traders using the Rydex funds are buying the dip and
showing no fear. In one sense though,
this activity is typical; Sentiment usually peaks AFTER a top and that may be what is happening now.
MARKET REPORT
Friday, the S&P 500 was up about 0.9% to 1983 (rounded). VIX was down about 5% to 14.86.
The yield on the 10-year Treasury Note rose to 2.53% at the close.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) was up significantly to 45% at the close Friday. New-lows outpaced New-highs Friday. The spread (new-highs minus new-lows) was minus-117.
(It was -174 Thursday). The 10-day moving average of change in the spread fell
to minus-10. In other words, over the last 10-days, on average, the spread has decreased
by 10 each day. Rising up-volume caused the internals to switch to neutral today.
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
Friday, the NTSM is HOLD. VIX fell enough to give a positive reading,
but other indicators are neutral. 
MY INVESTED STOCK POSITION
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
ENSCO’s chart doesn’t look good now since it has fallen below prior lows as the oil drillers have not performed well. On the plus side, dividend is 6%. PE is 8.5 so downside is somewhat limited.
TOO CHEAP TO IGNORE (Forbes)
“Ensco has a strong buy rating according to ValuEngine and is 19.6% undervalued with a one-year price target at $50.25.” – Story at…
http://www.forbes.com/sites/investor/2014/09/22/transocean-and-three-other-energy-stocks-too-cheap-to-ignore/?partner=yahootix
