“Initial claims for unemployment benefits rose last week, but continue to hover below pre-recession levels, the Labor Department said Wednesday. First-time claims were up 21,000 to a seasonally adjusted 313,000, the highest since early September.” Story at…
http://www.usatoday.com/story/money/business/2014/11/26/weekly-jobless-claims/70123574/
DURABLE GOODS ORDERS WEAK (Marketwatch)
“Aside from a huge bump in military aircraft contracts, orders for durable goods were surprisingly weak in October for the second straight month, an ominous sign that might suggest U.S. business investment is slowing.” Story at…
http://www.marketwatch.com/story/durable-goods-report-has-weak-tone-in-october-2014-11-26
CONSUMER SPENDING MODESTLY HIGHER (WSJ)
“U.S. consumer spending picked up in October, though the modest pace suggests that American households remain cautious heading into the holiday shopping season. Personal spending, which measures outlays for everything from clothing to home heating, rose a seasonally adjusted 0.2% from the prior month…In the third quarter of the year, consumer spending grew at a 2.2% annual pace, down from 2.5% in the second quarter.” Story at…
http://online.wsj.com/articles/u-s-consumer-spending-up-0-2-in-october-1417009731
STAY BULLISH – TOM LEE (CNBC)
"’I think everybody who's really following markets has to be careful just not to get bear traps,’ Lee, founder of Fundstrat Global Advisors, said in an interview with "Squawk on the Street.” The narrative this year is the U.S. economy has shown a lot of resilience. It is going to benefit from lower oil. The weakness in Europe and Asia haven't really damaged the U.S. economy.’ In other words, stay bullish, the noted bull said. " Story at...
http://www.cnbc.com/id/102220317?__source=yahoo%7cfinance%7cheadline%7cheadline%7cstory&par=yahoo&doc=102220317
VIX REMAINS ALMOST TOO LOW
VIX has dropped to 12.07. Below 12 has been a trouble point for stocks in 2013 and 2014. This is a counter-intuitive indicator since a falling VIX is generally good for stocks. “Trouble” is relative here. Don’t expect more than a 5% pullback based on recent history.
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 rose to 82% Wednesday. My sell point for this indicator is 83% based on a multiple of standard deviations similar during past extremes. That value is roughly 6-Bulls for every Bear. That isn’t all though. Other sets of long short funds show even larger extremes.
96% of investors are bullish in 2 long/short Nasdaq Rydex funds not included in my indicator and that again is a 5-dMA. That isn’t just high - it is almost beyond belief since it means that Bulls outnumber bears 25 to 1. The bottom line here is that it suggests trouble ahead for the markets if this stat doesn’t turn around.
MARKET REPORT
Wednesday, the S&P 500 was up about 0.3% to 2073 (rounded).
VIX was down about 1.5% to 12.07.
The yield on the 10-year Treasury Note fell again to 2.24, so the Bond Ghouls remain worried.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) rose to 54% 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 +150. (It was +163 Tuesday). The 10-day moving average of change in the spread was +6. In other words, over the last 10-days, on average, the spread has increased by 6-each day. Internals remained 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
The long-term NTSM system analysis remained to BUY Wednesday. Both VIX and Price indicators are positive. Others are neutral. The Buy rating is not particularly important now because a BUY call was made on 17 Oct. at the recent bottom.
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. ESV got slammed today on 2-points: (1) Seadrill canceled its dividend today, so there is fear that other oil services companies will too. Of the drillers who might, ESV was notably absent from the list I saw. (2) OPEC is not cutting production so drillers may be under further pressure.
ENSCO BUYING OPPORTUNITY (Seeking Alpha)
“After the retreat in its price, it is now an excellent opportunity for a long-term investment in ESV's stock at a cheap price.
Ensco will benefit from a more modern and efficient
fleet, and its massive $11 billion of contracted revenue backlog will guarantee
the continuous success of the company. ESV’s forward annual dividend yield is
extremely high at 7.52%, and the annual rate of dividend growth over the past
three years was also very high at 27.7%.” Commentary at…
http://seekingalpha.com/article/2706035-ensco-a-buying-opportunity-in-a-high-yielding-stock?uprof=44&dr=1Ensco 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.
