“Federal Reserve officials are worried that inflation may
stay low "for quite some time" despite the central bank's
multi-trillion dollar efforts to jump start the economy, according to minutes
from the October meeting released Wednesday…’We would have liked to have seen
more specifics in terms of a timeline for the first Fed rate increase. But
instead we saw, as expected, a more aggressive conversation regarding new and
lingering headwinds to that first rate increase,’ Lindsey Piegza, chief
economist at Sterne Agee, told CNBC.” Story at…
http://www.cnbc.com/id/102200011CREDIT MARKETS SUGGEST CAUTION (PFS Group)
“The U.S. stock market has displayed a strong rally off the October lows and has seasonal tailwinds at its back. However, near-term caution may be advised since we are starting to see some negative divergences in market breadth and the credit markets, suggesting a pause or pullback may be in the works…I do not expect a major correction to occur as the string of positive economic surprises are enjoying their greatest length since the first moves out of the 2007-2009 recession…while investors should exercise some near-term caution, do not get overly bearish as I believe the stock market is likely to head higher after a pause.” Commentary posted at Advisor perspectives at…
http://www.advisorperspectives.com/commentaries/pfs_111914.php
MARKET REPORT
Wednesday, the S&P 500 was down 0.15% to 2049 (rounded).
VIX was up about 1% to 14.00.
The yield on the 10-year Treasury Note rose to 2.36.
PULLBACK STARTING?
-RSI remains Overbought at a high value of 86, but it can remain elevated without any reaction in the markets for some time.
-The S&P 500 Index dropped to 3.6% above the 50-dMA Wednesday. That is still a value that usually leads to some selling.
-The percentage of stocks above their 200-dMA remained 53% Tuesday (data is a day late) and that is below the mean value of 65% (often a trouble signal) and is especially weak since the S&P 500 is near new highs.
-The Index spent 6-days in the range of 2038-2041; moved up 10-points and then fell today. This is reminiscent of the August 2014 pattern when there were 8-days with only a 4-point range before a 9-point move up and then a fall of 6-points. A more serious correction began less than 2-weeks later.
- A pullback still looks likely and may have started today, although small new highs are possible before any pullback begins. Most likely, it will be a Short-term downturn and small.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) fell to 51% at the close Wednesday. (A number above 50% is usually good news for the markets.) New-highs outpaced New-lows Wednesday. The spread (new-highs minus new-lows) was +14. (It was +137 Tuesday). The 10-day moving average of change in the spread was minus-15. In other words, over the last 10-days, on average, the spread has decreased by 15-each day. Internals remained neutral on the market, but internals deteriorated today and once again only breadth is keeping the indicator from being 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
The long-term NTSM system analysis remained neutral Wednesday.
MY INVESTED STOCK
POSITION
I moved some funds back into the market on 17 October
2014 as a trade and increased my position
in stocks from 30% to about 40% overall.
I added more 20 Oct, to bring my stock investments up to 50%. I am
semi-retired, 50% is Fully-invested for me. I remain 50% invested in stocks.--INDIVIDUAL STOCKS FROM A VALUE HOUND--
ENSCO (ESV): BUY
The chart looks good and oil prices are close to a bottom so I think Ensco is again a Buy. See related video on this page…
http://finance.yahoo.com/q?s=esv&ql=1
Ensco price is going to reflect oil prices. If you think they are near a bottom, this is a great buy with high dividends. If not; it’s a dog.
