“U.S. manufacturing output fell for the first time in seven months in August, but the underlying trend remained consistent with steadily rising factory activity. That was confirmed by other data Monday showing factory activity in New York state jumped to its highest level in nearly five years in September.” Story at…
http://www.dailyfinance.com/2014/09/15/industrial-production-slips-august/
BUY AND HOLD AT ANY PRICE - OK BUT NOT A GOOD IDEA (Hussman Funds)
“The uncorrected half-cycle advance since 2009 has been
accompanied by a resurgence of proponents advocating that stocks should simply
be bought and held indefinitely, regardless of price…we do encourage
buy-and-hold investors to understand and mentally prepare for the potential depth of
interim losses inherent in that strategy (we would presently allow
40-55%). We also urge investors to align the proportion of assets in equities
with the date that they’ll actually need the money. For funds that will be
spent an average of 15 years into the future, with no new investment contributions,
we believe that passive equity holdings should not exceed 30% of assets, in
order to match those expenditures with the duration of assets that must finance them...” –
John Hussman, PhD, Weekly Market Commentary from Hussman Funds at…http://www.hussmanfunds.com/wmc/wmc140915.htm
CRAMER: THIS WEEK MIGHT BE TOUGH (CNBC)
“Cramer thinks next week could be tough. "It's not a
bad idea to raise some cash," he said. …Fed may telegraph higher rates by the language it doesn't use in Wednesday's statement. Because of that expectation, rates in the bond market spiked on Friday. "Interest rates moved up very big with the 10-year Treasury climbing up to 2.6 percent. I know, historically that's not high but we know from the spring of 2013 that the velocity of the move is what freaks people out and causes them to sell stocks…" - Jim Cramer. Story at…
http://www.cnbc.com/id/101997189
S&P 500 - 2390 NEXT YEAR (Yahoo Finance)
“…after a mini-pullback, Harmon [Greg Harmon of Dragonfly Capital] does see a big move in the cards – basically to 2,390 in the S&P. While Harmon sees the market dipping a bit, and most likely treading water for the next months, he sees the long term target of 2390 sometime by the end of next year.” Story at…
http://finance.yahoo.com/news/s-p-500-to-zoom-to-2-390-by-end-of-next-year--technician-201303605.html
MARKET REPORT
Monday, the S&P 500 was down about 0.1% to 1984 (rounded). VIX was Up about 6% to 14.10.
The yield on the 10-year Treasury Note fell to 2.59% 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.
CORRECTION SOON? ODDS FAVOR A PULLBACK.
The daily up/down moves in the market continue to be
abnormally small and that usually leads to a pullback of some kind. Further,
for the last 3-weeks, there has been a tendency for smaller up moves and larger
down moves in price-volume. This trend is suggesting a pullback/correction. The
percentage of stocks in the NYSE above their 200-dMA fell to 55% as of Friday’s
close – it was 58% Thursday’s (data is a day late). The trouble point for this
stat is 62% so this is suggesting trouble ahead. Market Internals are negative again. That means down-time ahead for the S&P
500 is likely.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) fell to 41% at the close Monday.
(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-lows outpaced New-highs Monday. The spread (new-highs minus new-lows) was minus-47.
(It was -22 Friday). The 10-day moving average of change in the spread fell to
minus-22. In other words, over the last 10-days, on average, the spread has
decreased by 22 each day. The smoothed 10-dMA
of Up-Volume is once again declining.Decliners outpaced advancers today by nearly 2 to 1 while the S&P 500 was nearly flat. Usually, the S&P 500 will follow the majority so that implies a down day tomorrow. Overall, Market Internals are 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
Monday, the NTSM is HOLD. The volume indicator is Positive. All other
indicators are neutral. Long-term indicators are declining, but not too quickly
so, for now, they remain 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
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
Russian sanctions are expected to hurt oil and the drillers got caught up in the selling Friday and a little today.
