“Factory activity in the U.S. mid-Atlantic region expanded at its fastest pace in years in November, with growth blowing past expectations, according to a survey that immediately triggered doubt as to its accuracy. Economists were quick to pour cold water on the number, suggesting it was an aberration unlikely to hold up. The Philadelphia Federal Reserve Bank said its business activity index jumped to 40.8 from 20.7 in October, its highest since December 1993 and more than double the 18.3 that analysts had expected, according to a Reuters poll…Internally, the Philadelphia survey showed that 49 percent of firms reported increased activity against just 9 percent that reported a decrease, while the new orders index more than doubled…” Story at…
http://www.cnbc.com/id/102204062
JOBLESS CLAIMS ABOVE FORECAST (Advisor Perspectives)
“Today's seasonally adjusted number at 291K was above the Investing.com forecast of 286K and Briefing.com was looking for 285K. The four-week moving average at 287.5K is now 8.5K above its 14-year interim low set two weeks ago. Story at…
http://www.advisorperspectives.com/dshort/updates/Weekly-Unemployment-Claims.php
LEADING INDICATORS (Briefing.com)
“The Conference Board's Leading Economic Index increased 0.9% in October after increasing a downwardly revised 0.7% (from 0.8%) in September. The Briefing.com consensus expected the leading indicators index to increase 0.6%...The Leading Indicators Index points toward a generally improving economy.
http://www.briefing.com/Investor/Calendars/Economic/Releases/leader.htm
SENTIMENT
…is screaming high at 81% on a 5-day moving average basis. My sell point is now 83% based on a multiple of standard deviations from the mean that was present at the trough of the 2002 bear market. That was an extreme negative value. We’re now approaching the inverse – an extreme bullish value.
Two of the Rydex funds I track were 96% bullish for a couple of days this week. In other words 96% of the money was bet long when comparing the 2-long/short Nasdaq funds. That means that there were about 25-bulls for every bear. That sort of overly bullish sentiment is a recipe for trouble. If it persists it will set the stage for a significant pullback. Sentiment should never be traded alone though. It has been high for all of 2014 so it can’t be used alone for timing.
MARKET REPORT
Thursday, the S&P 500 was up 0.2% to 2053 (rounded).
VIX was down about 3% to 13.58.
The yield on the 10-year Treasury Note fell to 2.33 so the Bond Ghouls are worried a bit.
PULLBACK STARTING?
I won’t run down the list of reasons again. See yesterday’s post; but I think the S&P 500 is close to, or at, a high that will precede a pullback of 5% “or so”. The 5% number is just a guess based on recent history; the “or so” part could obviously be higher...or not. Who knows? Hey...what did you expect for free analysis! (You could pay someone else for their guess.)
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) rose to 52% at the close Thursday. (A number above 50% is usually good news for the markets.) New-highs outpaced New-lows Thursday. The spread (new-highs minus new-lows) was +56. (It was +14 Wednesday). The higher spread today is good for the bulls if it continues to improve. The 10-day moving average of change in the spread was minus-5. In other words, over the last 10-days, on average, the spread has decreased by 5-each day. Internals remained neutral on the market; 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 Thursday.
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.
