“The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, but that probably does not signal a material shift in labor market conditions as claims remain near their pre-recession levels. Initial claims for state unemployment benefits increased 11,000 to a seasonally adjusted 315,000 for the week ended Sept. 6, the highest level since late June, the Labor Department said on Thursday.” Story at…
http://www.foxbusiness.com/economy-policy/2014/09/11/weekly-jobless-claims-unexpectedly-rise/
TWO IMPORTANT WORDS FROM THE FED (MarketWatch)
“When the Federal Reserve concludes a two-day meeting
next week, traders will focus on two words in its policy statement. Since
March, the Fed has promised that it intends to hold rates steady for a
“considerable time” after it stops buying bonds, now on track to end in
October…Fed watchers think it is a close call on whether this language gets
dropped from the policy statement next week.’ Story at…
http://www.marketwatch.com/story/the-only-two-words-that-will-matter-at-the-fed-2014-09-10
McDONALDS TELLS WHY THE MARKET WILL COLLAPSE: MARK FABER(CNBC) – NOT!
“On Tuesday, McDonald's
reported that global same-store sales fell 3.7 percent in August, well short of
expectations…McDonald's is a very good indicator of the global economy. If
McDonald's doesn't increase its sales, it tells you that the monetary policies
have largely failed in the sense that prices are going up more than disposable
income, and so people have less purchasing power." – Marc Faber. Story at…http://www.cnbc.com/id/101993395
CMT: I think Faber has it backwards. Compare McDonalds and the S&P 500 during the last recession and what do you get? McDonalds did great while most stocks tanked. I’d suggest that the reason was that as people were financially stressed during the recession they ate at Mickey-D’s rather than Chez-expensive. The recent McDonalds weakness has little to do with the economy. Ignore Faber on this one.
RECESSION? INVESTORS ARE NOT CONCERNED
I used to track the Morgan Stanley Cyclical Index (CYC)
vs the S&P 500 to judge investor’s concern about recession. The CYC is no longer reported, so I switched
to another basket of cyclical stocks, the Industrial Select Sector SPDR ETF
(XLI). XLI had been underperforming the
S&P 500 suggesting some investor concern, but that is no longer true. XLI is outperforming the S&P 500 in the
short term.
MARKET REPORT
Thursday, the S&P 500 was up about 0.1% to 1997 (rounded). VIX was down about 1% to 12.80.
The yield on the 10-year Treasury Note rose slightly 2.55% at the close; the bond Ghouls remain worried. (This may actually be foreign demand driving down yields rather than fear of an economic decline.)
RISING RATES NOT GOOD FOR THE S&P 500 (Yahoo Finance)
“Many have viewed the historically low yields as a big
driver for stocks, given that they make equities more attractive relative to
bonds. This week, however, rates have begun to move higher. And that’s causing
some to worry about the prognosis for the great American rally. ‘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?
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 correction. The percentage of stocks in the NYSE above their 200-dMA was up to 57% as of Wednesday’s close – it was 56% Tuesday. (data is a day late). The trouble point for this stat is 62% so this is still suggesting trouble ahead and very soon, but I doubt that it will be the “big one” and it might just be another 5% trip to the lower trend line. I didn’t learn anything today. Another up day Friday may show that a correction is farther away and not as likely in the very near term.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) remained 47% at the close Thursday. (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 equaled New-lows Thursday. The spread (new-highs minus new-lows) was 0. (It was +5 Wednesday). The 10-day moving average of change in the spread rose to minus-15. In other words, over the last 10-days, on average, the spread has decreased by 15 each day.
Internals remained negative on the market today.
NTSM
Thursday, the NTSM is HOLD. The volume indicator is Positive. All 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…Sort of…see below
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
Looks like the options boys like it at Monday’s price.
http://finance.yahoo.com/news/ensco-attracts-heavy-call-buying-104523422.htmlESV held its own today (9/10/2014) even as oil prices continue to fall. I’d say that is bullish, but this stock will need to be held for the long term since there isn’t currently a catalyst to take its price higher. In the interim, I’ll collect the 6% dividend.
