http://www.advisorperspectives.com/dshort/guest/Lance-Roberts-140912-Things-to-Ponder.php
RETAIL SALES (Reuters)
U.S. retail sales rose broadly in August…The
Commerce Department said on Friday retail sales increased 0.6 percent last
month...’It is further indication that the underlying positive momentum in the
U.S. economy is being sustained,’ said Millan
Mulraine, deputy chief economist at TD Securities in New York.” Story at…http://www.reuters.com/article/2014/09/12/us-retail-sales-idUSKBN0H71DF20140912
CONSUMER SENTIMENT UP (CNBC)
“U.S. consumer sentiment rose in September to its highest
in more than a year on more upbeat views on the domestic economy in the coming
year, a survey released on Friday showed. The Thomson Reuters/University of
Michigan's preliminary September reading on the overall index on consumer
sentiment came in at 84.6, the highest since July 2013…”http://www.cnbc.com/id/101958649
MARKET REPORT
Friday, the S&P 500 was down about 0.6% to 1986 (rounded). VIX was up about 4% to 13.34.
The yield on the 10-year Treasury Note rose to 2.61% 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 was up to 58% as of
Thursday’s close – it was 57% Wednesday (data is a day late). The trouble point
for this stat is 62% so this is suggesting trouble ahead. For the past 2-days
it has been moving up, but I think today it will again fall. Market Internals are down again. That means down-time ahead for the S&P
500 is likely.
BUT…STATISTICALLY SIGNIFICANT DAY FRIDAY – SUGGESTS AN UP
DAY MONDAY
Friday was statistically-significant in my system. The just means the size of today’s move was
higher than the recent normal as measured by standard deviation from the
norm. It takes a smaller move now to get
a statistically significant day, because the daily moves recently in price and
volume have been much smaller than usual. That implies Monday will be an up-day
about 62% of the time.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) fell to 45% at the close Friday.
(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 Friday. The spread (new-highs minus new-lows) was -22.
(It was +0 Thursday). 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. Up-Volume improved just enough
to swing the internals to 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
Friday, 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
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
