The NTSM analysis is Buy based on Volume and Price indicators that are positive.
I am 50% invested in stocks now, but since I am semi-retired, that is fully invested for me.
I’ll get back to a regular schedule after the
Holidays.
Sunday, December 28, 2014
All is calm…
Market Internals look good.
The NTSM analysis is Buy based on Volume and Price indicators that are positive.
I am 50% invested in stocks now, but since I am semi-retired, that is fully invested for me.
The NTSM analysis is Buy based on Volume and Price indicators that are positive.
I am 50% invested in stocks now, but since I am semi-retired, that is fully invested for me.
Tuesday, December 23, 2014
Time to Buy
MARKET REPORT
Tuesday, the S&P 500 was UP 0.2% to 2082 (rounded).
VIX was down about 3% to 14.80.
The yield on the 10-year Treasury Note was 2.26
Tuesday, the S&P 500 was UP 0.2% to 2082 (rounded).
VIX was down about 3% to 14.80.
The yield on the 10-year Treasury Note was 2.26
TIME TO BUY
The 5-10-20 timer switched to a positive reading along
with market internals so the NTSM analysis is BUY. I had previously calculated 2084 as a
crossover point, however, moving averages shift daily too, so it is somewhat of
a moving target.
Chart wise the S&P 500 is at its upper trend line so,
buying now means that I sold low and bought high during the recent wild
turnaround. Ouch. (I said worse things the other day, but there
is no point in publishing them here. I feel stupid enough.)
There is chatter of a turn to the downside in January and
even the Wall Street Journal did an article on the possibility. That may be
what I think too, but an old trader used to say, “Trade what you see not what
you think.” In other words, I am increasing stock investments to 50% invested
in stocks as of tomorrow at the close, based on strong numbers, even if a minor
pullback may be in the offing.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) was higher to 56% 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 +265. (It was +169 Monday). The 10-day moving average of change in the
spread was +26. In other words, over the last 10-days, on average, the spread has
INCREASED by 26-each day.
Market Internals are now 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 BUY today. The Buy
signal is based on the 5-10-20 Timer and market internals.
MY INVESTED STOCK POSITION
I will increase my stock allocation to 50% invested in
stocks as of 24 Dec.
Friday, December 19, 2014
A Buy-signal soon? Let’s See What Santa Brings.
MARKET REPORT
Friday, the S&P 500 was UP 0.5% to 2071 (rounded).
VIX was down about 0.8% to 16.68.
The yield on the 10-year Treasury Note rose to 2.21.
My guess is that the Shorts finished some late short-covering around 3:30 and the Index faded down into the close. I’d expect more of a fade on Monday, but I am still surprised by the strength of the rally. Oil was up 6% today so the 3-day rally may be related to the bounce in oil. (Hmmm. Did those guys on Wall Street have inside information? Do ya’ think?)
The first bounce in a bear market is usually early and oil is definitely in a huge bear market. (The stock market is certainly not currently in a bear market.) Thus, it is likely that oil and oil related stocks have not seen their lows. The stock market may have more trouble ahead if it remains coupled to oil. There is less conviction now that falling oil is bad so the stock market doesn’t have to follow oil down. Still…
Chart wise the S&P 500 is close to the upper trend line so, if anything, upside potential is somewhat subdued here; I am not in a great rush to get in, but I will strictly follow my numbers. The Buy signal is based on the 5-10-20 Timer and market internals. If we continue up, I will be a Buyer at or above 2084. In October we identified a bottom. This time there was no way to call that bottom – I think I was out maneuvered by the computers.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) was higher to 49% at the close Friday. (A number below 50% is usually BAD news for the markets.) New-highs outpaced New-lows Friday. The spread (new-highs minus new-lows) was +190. (It was +168 Thursday). The 10-day moving average of change in the spread was +26. In other words, over the last 10-days, on average, the spread has INCREASED by 26-each day.
Internals remained neutral on the market, but only because the 10-day moving average of %-stocks advancing has not broken above 50%.
NTSM
The long-term NTSM system analysis remained HOLD today. The Buy signal is based on the 5-10-20 Timer and market internals unless VIX falls dramatically and right now that doesn’t look likely. If we continue up, I will be a Buyer at or above 2084.
Currently, the Buy signal is based on the 5-10-20 Timer and market internals. If we continue up, I will be a Buyer at or above 2084.
In October we identified the bottom. This time there was no way to call the bottom – I think I was out-maneuvered by the computers.
I will be very busy over the Holidays so I may not be able to post until after the New Year. Have a great Hanukkah Season and a Merry Christmas!
Friday, the S&P 500 was UP 0.5% to 2071 (rounded).
VIX was down about 0.8% to 16.68.
The yield on the 10-year Treasury Note rose to 2.21.
My guess is that the Shorts finished some late short-covering around 3:30 and the Index faded down into the close. I’d expect more of a fade on Monday, but I am still surprised by the strength of the rally. Oil was up 6% today so the 3-day rally may be related to the bounce in oil. (Hmmm. Did those guys on Wall Street have inside information? Do ya’ think?)
The first bounce in a bear market is usually early and oil is definitely in a huge bear market. (The stock market is certainly not currently in a bear market.) Thus, it is likely that oil and oil related stocks have not seen their lows. The stock market may have more trouble ahead if it remains coupled to oil. There is less conviction now that falling oil is bad so the stock market doesn’t have to follow oil down. Still…
Chart wise the S&P 500 is close to the upper trend line so, if anything, upside potential is somewhat subdued here; I am not in a great rush to get in, but I will strictly follow my numbers. The Buy signal is based on the 5-10-20 Timer and market internals. If we continue up, I will be a Buyer at or above 2084. In October we identified a bottom. This time there was no way to call that bottom – I think I was out maneuvered by the computers.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) was higher to 49% at the close Friday. (A number below 50% is usually BAD news for the markets.) New-highs outpaced New-lows Friday. The spread (new-highs minus new-lows) was +190. (It was +168 Thursday). The 10-day moving average of change in the spread was +26. In other words, over the last 10-days, on average, the spread has INCREASED by 26-each day.
Internals remained neutral on the market, but only because the 10-day moving average of %-stocks advancing has not broken above 50%.
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 HOLD today. The Buy signal is based on the 5-10-20 Timer and market internals unless VIX falls dramatically and right now that doesn’t look likely. If we continue up, I will be a Buyer at or above 2084.
MY INVESTED STOCK POSITION
I am 30% invested in stocks as of 16 Dec based on the
SELL signal the previous day. Currently, the Buy signal is based on the 5-10-20 Timer and market internals. If we continue up, I will be a Buyer at or above 2084.
In October we identified the bottom. This time there was no way to call the bottom – I think I was out-maneuvered by the computers.
I will be very busy over the Holidays so I may not be able to post until after the New Year. Have a great Hanukkah Season and a Merry Christmas!
Thursday, December 18, 2014
Unemployment Claims Fall…Philadelphia FED Activity Slows…Leading Indicators UP…Big Turnaround in the Stock Market
INITIAL CLAIMS FALL (Business Insider)
“Initial unemployment-insurance claims fell to 289,000 this week, from 295,000 a week ago…. "The underlying trend in claims, we believe, is still 285-to-290K, low enough to signal very strong payroll growth, assuming indicators of the hiring side of the payroll equation remain strong," Pantheon Macroeconomics Chief Economist Ian Shepherdson said.” Story at…http://www.businessinsider.com/initial-jobless-claims-dec-13-2014-2014-12
PHILADELPHIA FED (Reuters via CNBC)
“Factory activity in the U.S. mid-Atlantic region grew at a slower pace in December, a survey showed on Thursday. The Philadelphia Federal Reserve Bank said its business activity index fell to 24.5 from 40.8 the month before. That was shy of economists' expectations for 27, according to a Reuters poll.” Story at…
http://www.cnbc.com/id/102280830
LEADING INDICATORS (MarketWatch)
“The leading economic index rose 0.6% in November, indicating the U.S. is likely to expand at a fairly robust pace in the next few months, according to the Conference Board said. "The increase in the LEI signals continued moderate growth through the winter season," Ken Goldstein, economist at the board, said Thursday.” Story at….
http://www.marketwatch.com/story/us-leading-indicators-climb-06-in-november-2014-12-18?dist=lcountdown
MARKET REPORT
Thursday, the S&P 500 was UP 2.4% to 2061 (rounded).
VIX was down about 14% to 16.81.
The yield on the 10-year Treasury Note rose to 2.21.
Thursday was another statistically significant day. That would lead to a down day tomorrow (Friday) about 62% of the time. (A statistically-significant day occurs in my system when the size of the day’s move is larger than the recent normal as measured by standard deviation from the norm.) There have been 8-statistically significant days in the last 3-weeks. That usually happens after a top, but other indicators are not confirming a top.
The market internals have reversed dramatically, especially new-hi/new-lo data, and that is indicative of a market bottom. It’s pretty odd. I can’t remember a nearly straight down move over 7-sessions followed by a straight up move that almost got back to the old highs in 2-sessions that wasn’t in the midst of a major correction. I’m not saying this is a major correction; but rather the opposite – these moves came out of the blue seemingly based on falling oil.
Today, Thursday, oil was down between 2% (Brent) and 3% (USO) while stocks screamed up. Now falling oil is good for the stock market?
Chart wise the S&P 500 is close to the upper trend line so if anything upside potential is somewhat subdued here so I am not in a great rush to get in, but I will strictly follow my numbers if I get a buy signal.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) was significantly higher to 48% at the close Thursday. (A number below 50% is usually BAD news for the markets.) In a reversal, New-highs outpaced New-lows Thursday. The spread (new-highs minus new-lows) was +168. (It was -36 Wednesday). The 10-day moving average of change in the spread was +12. In other words, over the last 10-days, on average, the spread has INCREASED by 12-each day.
Internals remained neutral on the market, but only because the 10-day moving average of %-stocks advancing has not broken above 50%.
NTSM
The long-term NTSM system analysis switched to HOLD today.
Given the improved market internals, I am tempted to increase exposure to the stock market to a 50% level, but I am not comfortable with recent market action. I suspect a lot of today’s move was due to early Santa Clause positioning, i.e., the Santa rally happened today. With the Index near the upper trend line there is little upside potential in the near term so I am not inclined to rush back in. The Holidays will most likely be characterized by low volume and more confusion. Bottom line: I will move when signals become clearer.
“Initial unemployment-insurance claims fell to 289,000 this week, from 295,000 a week ago…. "The underlying trend in claims, we believe, is still 285-to-290K, low enough to signal very strong payroll growth, assuming indicators of the hiring side of the payroll equation remain strong," Pantheon Macroeconomics Chief Economist Ian Shepherdson said.” Story at…http://www.businessinsider.com/initial-jobless-claims-dec-13-2014-2014-12
PHILADELPHIA FED (Reuters via CNBC)
“Factory activity in the U.S. mid-Atlantic region grew at a slower pace in December, a survey showed on Thursday. The Philadelphia Federal Reserve Bank said its business activity index fell to 24.5 from 40.8 the month before. That was shy of economists' expectations for 27, according to a Reuters poll.” Story at…
http://www.cnbc.com/id/102280830
LEADING INDICATORS (MarketWatch)
“The leading economic index rose 0.6% in November, indicating the U.S. is likely to expand at a fairly robust pace in the next few months, according to the Conference Board said. "The increase in the LEI signals continued moderate growth through the winter season," Ken Goldstein, economist at the board, said Thursday.” Story at….
http://www.marketwatch.com/story/us-leading-indicators-climb-06-in-november-2014-12-18?dist=lcountdown
MARKET REPORT
Thursday, the S&P 500 was UP 2.4% to 2061 (rounded).
VIX was down about 14% to 16.81.
The yield on the 10-year Treasury Note rose to 2.21.
Thursday was another statistically significant day. That would lead to a down day tomorrow (Friday) about 62% of the time. (A statistically-significant day occurs in my system when the size of the day’s move is larger than the recent normal as measured by standard deviation from the norm.) There have been 8-statistically significant days in the last 3-weeks. That usually happens after a top, but other indicators are not confirming a top.
The market internals have reversed dramatically, especially new-hi/new-lo data, and that is indicative of a market bottom. It’s pretty odd. I can’t remember a nearly straight down move over 7-sessions followed by a straight up move that almost got back to the old highs in 2-sessions that wasn’t in the midst of a major correction. I’m not saying this is a major correction; but rather the opposite – these moves came out of the blue seemingly based on falling oil.
Today, Thursday, oil was down between 2% (Brent) and 3% (USO) while stocks screamed up. Now falling oil is good for the stock market?
Chart wise the S&P 500 is close to the upper trend line so if anything upside potential is somewhat subdued here so I am not in a great rush to get in, but I will strictly follow my numbers if I get a buy signal.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) was significantly higher to 48% at the close Thursday. (A number below 50% is usually BAD news for the markets.) In a reversal, New-highs outpaced New-lows Thursday. The spread (new-highs minus new-lows) was +168. (It was -36 Wednesday). The 10-day moving average of change in the spread was +12. In other words, over the last 10-days, on average, the spread has INCREASED by 12-each day.
Internals remained neutral on the market, but only because the 10-day moving average of %-stocks advancing has not broken above 50%.
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 switched to HOLD today.
MY INVESTED STOCK POSITION
I am 30% invested in stocks as of 16 Dec based on the
SELL signal Monday. Given the improved market internals, I am tempted to increase exposure to the stock market to a 50% level, but I am not comfortable with recent market action. I suspect a lot of today’s move was due to early Santa Clause positioning, i.e., the Santa rally happened today. With the Index near the upper trend line there is little upside potential in the near term so I am not inclined to rush back in. The Holidays will most likely be characterized by low volume and more confusion. Bottom line: I will move when signals become clearer.
Amazing Turnaround
Oil opened high today but it is continuing to fall this morning while
stock markets are on a tear upward. I’m
not buying that yesterday’s FED statement on rates is the cause of the
bullishness.
It may be that investors have decided en masse that falling oil is good not bad!
At 10AM the NTSM analysis is nearly BUY, but the system is based on closing values and it is always risky to project the rest of the day on the first half hour of trading. Even if the analysis were to show a Buy today, I’d rather wait until tomorrow to move since there has to be some consolidation and prices should be lower tomorrow. Further, if oil keeps falling some of those oil worries may return.
I have only had a SELL followed immediately by a BUY a couple times in 10-years.
It may be that investors have decided en masse that falling oil is good not bad!
At 10AM the NTSM analysis is nearly BUY, but the system is based on closing values and it is always risky to project the rest of the day on the first half hour of trading. Even if the analysis were to show a Buy today, I’d rather wait until tomorrow to move since there has to be some consolidation and prices should be lower tomorrow. Further, if oil keeps falling some of those oil worries may return.
I have only had a SELL followed immediately by a BUY a couple times in 10-years.
Wednesday, December 17, 2014
FOMC Meeting…Consumer Price Index (CPI)...Another Financial Crisis?
FOMC MEETING
The Fed said they will remain “patient” and this is “consistent” with the policy of waiting a “considerable time” before raising rates. In the end, investors concluded that no change in rate-policy is coming soon; the markets immediately bounced up.
CPI (Briefing.com)
Consumer prices declined 0.3% in November after being unchanged in October. That was the biggest decline in the CPI since falling 0.8% in December 2008. The Briefing.com consensus expected the CPI to decline 0.1%....The entire decline in prices can be attributed to the energy sector.” Details at…
http://www.briefing.com/Investor/Calendars/Economic/Releases/cpi.htm
WHAT ARE THE ODDS OF A GLOBAL-LED FINANCIAL CRISIS (Naked Capitalism)
“…lets make some comparisons with the Global Financial Crisis. In late 2007, as US house prices were falling, debt markets began to shut for those that financed housing projects. The US Fed stood by expecting the housing market to clear without too much difficulty given sub-prime was a relatively small segment of the market. It considered sub-prime risks to be contained and, although it began cutting interest rates, risk was considered to have been healthily spread via derivatives.
What happened instead was that the risk had become opaque and filtered through to everyone and nobody, and as housing debt soured counter-parties to the debt began to wonder who held what. Trust progressively broke down, more lending was pulled, asset prices fell further, so on and so forth. The feedback loop ended in a virtual worldwide bank run.
The analogy with today is unsettling. The sub-prime market this time is US high yield energy debt. It is a relatively small segment of the US junk bond universe so the Fed is standing by actively considering rate hikes on the assumption that the shale market will clear relatively easily. They’ll probably be right. However, the risks that shale debt is only the core of a rising bad debt problem for financial markets appears to be rising. The broader US corporate bond market is also seeing new selling…” Commentary from…
http://www.nakedcapitalism.com/2014/12/odds-commodities-led-global-financial-crisis.html
THIS IS NOT THE SUBPRIME HOUSING BUBBLE 2.0 (Seeking Alpha)
“…things have gotten frothy in the oil patch, but it is nowhere near the magnitude of the housing debacle. The major difference is the debt has not been securitized like the subprime loan debt was increasing the risk exponentially. The securitization of subprime loans was what brought the market to its knees, not the defaults of the homes themselves. Even so, the drop in oil prices will shake out weak players…Oil's dramatic drop is nowhere near over…” Commentary at…
http://seekingalpha.com/article/2757465-kinder-morgan-and-the-good-the-bad-and-the-ugly-truth-regarding-falling-oil-prices?ifp=0
My comment: The two previous stories disagree somewhat, but one point is true. There is fear over falling oil prices and the related unknowns in the short run. While there was fear over Ebola too, the Sep/Oct correction bottomed in 19-days as fears were quickly resolved. It seems to me that this crisis will take longer to resolve. Today is day 8 after the Top of 2075. On the other hand, today the Index bounced up from its lower trend line. Is the market headed up from here? Has this oil thing been a big fakeout? I doubt it. An oil bounce was overdue.
MARKET REPORT
Wednesday, the S&P 500 was up 2% to 2013 (rounded).
VIX was down about 18% to 19.33.
The yield on the 10-year Treasury Note rose to 2.14.
Wednesday was a statistically significant day. That would lead to a down day tomorrow (Thursday) about 62% of the time. (A statistically-significant day occurs in my system when the size of the day’s move is larger than the recent normal as measured by standard deviation from the norm.) There have been 7-statistically significant days in the last 3-weeks. That usually indicates a top, although to a lesser extent it can occur at a bottom too, but only after a top cycle of significant days has been completed.
Today looked like short covering. I don’t think the drop is over. The S&P 500 needs to test the 200-dMA at about 1950. Oil was falling late in the day and I think the S&P 500 is likely to follow soon.
As always there are some signals that run cross current to the bear case. Today’s numbers were a pretty big reversal in new-high/new-low numbers and breadth. A bottom may not be too far away.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) was 43% at the close Wednesday. (A number below 50% is usually BAD news for the markets.) New-lows outpaced New-highs Wednesday. The spread (new-highs minus new-lows) was minus-36. (It was -397 Tuesday). The 10-day moving average of change in the spread was minus-51 . In other words, over the last 10-days, on average, the spread has decreased by 15-each day.
Internals switched to neutral on the market.
NTSM
The long-term NTSM system analysis remained SELL today, Wednesday. Volume and Panic indicators are negative. VIX moved to neutral.
The Fed said they will remain “patient” and this is “consistent” with the policy of waiting a “considerable time” before raising rates. In the end, investors concluded that no change in rate-policy is coming soon; the markets immediately bounced up.
CPI (Briefing.com)
Consumer prices declined 0.3% in November after being unchanged in October. That was the biggest decline in the CPI since falling 0.8% in December 2008. The Briefing.com consensus expected the CPI to decline 0.1%....The entire decline in prices can be attributed to the energy sector.” Details at…
http://www.briefing.com/Investor/Calendars/Economic/Releases/cpi.htm
WHAT ARE THE ODDS OF A GLOBAL-LED FINANCIAL CRISIS (Naked Capitalism)
“…lets make some comparisons with the Global Financial Crisis. In late 2007, as US house prices were falling, debt markets began to shut for those that financed housing projects. The US Fed stood by expecting the housing market to clear without too much difficulty given sub-prime was a relatively small segment of the market. It considered sub-prime risks to be contained and, although it began cutting interest rates, risk was considered to have been healthily spread via derivatives.
What happened instead was that the risk had become opaque and filtered through to everyone and nobody, and as housing debt soured counter-parties to the debt began to wonder who held what. Trust progressively broke down, more lending was pulled, asset prices fell further, so on and so forth. The feedback loop ended in a virtual worldwide bank run.
The analogy with today is unsettling. The sub-prime market this time is US high yield energy debt. It is a relatively small segment of the US junk bond universe so the Fed is standing by actively considering rate hikes on the assumption that the shale market will clear relatively easily. They’ll probably be right. However, the risks that shale debt is only the core of a rising bad debt problem for financial markets appears to be rising. The broader US corporate bond market is also seeing new selling…” Commentary from…
http://www.nakedcapitalism.com/2014/12/odds-commodities-led-global-financial-crisis.html
THIS IS NOT THE SUBPRIME HOUSING BUBBLE 2.0 (Seeking Alpha)
“…things have gotten frothy in the oil patch, but it is nowhere near the magnitude of the housing debacle. The major difference is the debt has not been securitized like the subprime loan debt was increasing the risk exponentially. The securitization of subprime loans was what brought the market to its knees, not the defaults of the homes themselves. Even so, the drop in oil prices will shake out weak players…Oil's dramatic drop is nowhere near over…” Commentary at…
http://seekingalpha.com/article/2757465-kinder-morgan-and-the-good-the-bad-and-the-ugly-truth-regarding-falling-oil-prices?ifp=0
My comment: The two previous stories disagree somewhat, but one point is true. There is fear over falling oil prices and the related unknowns in the short run. While there was fear over Ebola too, the Sep/Oct correction bottomed in 19-days as fears were quickly resolved. It seems to me that this crisis will take longer to resolve. Today is day 8 after the Top of 2075. On the other hand, today the Index bounced up from its lower trend line. Is the market headed up from here? Has this oil thing been a big fakeout? I doubt it. An oil bounce was overdue.
MARKET REPORT
Wednesday, the S&P 500 was up 2% to 2013 (rounded).
VIX was down about 18% to 19.33.
The yield on the 10-year Treasury Note rose to 2.14.
Wednesday was a statistically significant day. That would lead to a down day tomorrow (Thursday) about 62% of the time. (A statistically-significant day occurs in my system when the size of the day’s move is larger than the recent normal as measured by standard deviation from the norm.) There have been 7-statistically significant days in the last 3-weeks. That usually indicates a top, although to a lesser extent it can occur at a bottom too, but only after a top cycle of significant days has been completed.
Today looked like short covering. I don’t think the drop is over. The S&P 500 needs to test the 200-dMA at about 1950. Oil was falling late in the day and I think the S&P 500 is likely to follow soon.
As always there are some signals that run cross current to the bear case. Today’s numbers were a pretty big reversal in new-high/new-low numbers and breadth. A bottom may not be too far away.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) was 43% at the close Wednesday. (A number below 50% is usually BAD news for the markets.) New-lows outpaced New-highs Wednesday. The spread (new-highs minus new-lows) was minus-36. (It was -397 Tuesday). The 10-day moving average of change in the spread was minus-51 . In other words, over the last 10-days, on average, the spread has decreased by 15-each day.
Internals switched to neutral 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 SELL today, Wednesday. Volume and Panic indicators are negative. VIX moved to neutral.
MY INVESTED STOCK POSITION
I am 30% invested in stocks as of 16 Dec based on the
SELL signal Monday. See my post from
yesterday and earlier today for more details.
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