The S&P 500 is staging a bit of a recovery after last week's plunge…a historical analysis of similar situations suggests that the next few months could be sweet indeed for the market...On the whole, November and December tend to be rather strong months for stocks…” Story at…
http://www.cnbc.com/id/102103940?__source=yahoo%7cfinance%7cheadline%7cheadline%7cstory&par=yahoo&doc=102103940
STABLE OIL SUPPORTS THE MARKETS (CNBC)
“Art Cashin, UBS director of floor operations at the NYSE, said as long as oil remains above $82, it is supportive of the market. Stabilization in oil prices, calmed Ebola fears and expectations the Federal Reserve will maintain its dovish, easy-money policy stance have all led to a decent recovery in stocks the past three days after last week's volatile action.” Story & Video at…
http://www.cnbc.com/id/102107513?trknav=homestack:topnews:5
SENTIMENT
I measure Sentiment as %-Bulls calculated from the 5-dMA of Bulls/(Bulls+Bears) based on funds invested in selected Rydex/Guggenheim funds. Sentiment dropped to 64% Monday. It was 73%-bulls 4-weeks ago at the recent market top. Sentiment acted as it usually does during corrections. It increased to 76% about a week after the top as Traders bought the dip. It then began to fall as Traders realized the dip was going to be a bit more than a dip. While the sentiment remains high, the drop in Sentiment suggests that the markets can go higher from here. Currently, my sentiment indicator would not turn negative until the %-bulls reaches 84%-bulls.
STATISTICALLY SIGNIFICANT DAY
Tuesday was statistically-significant in my system, because the size of today’s move was larger than the recent normal as measured by standard deviation from the norm. That implies Wednesday would be a down-day about 62% of the time. That may be, but I place less importance on this stat when the market is recovering because I expect everyone to jump on the train as it pulls out of the station.
MARKET REPORT
Tuesday, the S&P 500 was up about 2% to1941 (rounded). It closed nearly 2% above the 200-day moving average Tuesday and that’s a good sign.
VIX was down about 12% to 16.27.
The yield on the 10-year Treasury Note rose to 2.22%.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) rose to 55% at the close Tuesday. (A number above 50% is usually good news for the markets.) New-highs outpaced New-lows Tuesday. The spread (new-highs minus new-lows) was +52. (It was +12 Monday). The 10-day moving average of change in the spread rose to +20. In other words, over the last 10-days, on average, the spread has increased by 20 each day.
Internals switched to positive on the market.
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
As I have posted several times I have been buying since last Friday, so I am setting the NTSM long term indicator to BUY. (That’s based on technical analysis since the NTSM indicators will take a while to reset.)
MY INVESTED STOCK POSITION
I moved some funds back into the market on Friday, 17
October 2014 as a trade and increased my position
in stocks from 30% to about 40% overall.
I added more Monday to make my stock investments up to 50%. This
move was based on my comments 16 Oct that a Tradable bottom had been set. At this point, it looks like more than just a tradable bottom and hopefully this rally will carry thru December. 50% is Fully invested for me since I am semi-retired.--INDIVIDUAL STOCKS FROM A VALUE HOUND--
ENSCO (ESV): HOLD
