“German manufacturing unexpectedly shrank last month…A Purchasing Managers Index for Germany fell to 49.5 from 51.4, London-based Markit Economics said today…’Germany’s export engine has stalled,’ Williamson said. New business is also falling in both France and Italy, boding ill for production in coming months.’” Story at…
http://www.bloomberg.com/news/2014-12-01/german-manufacturing-slump-pulls-euro-area-near-stagnation-1-.html
DANGEROUS TO BET AGAINST THIS MARKET (MarketWatch)
“With the seasonally strong time of year serving as a springboard, shares are setting up for upward revaluation. While the market can be excused for a December of lower prices in the wake of its seven-week rally, no one should be holding their breath for one. Overall, one does not want to bet against the market this month.” Story at…
http://www.marketwatch.com/story/its-dangerous-to-bet-against-this-market-2014-12-02?dist=afterbell
MARKET REPORT
Tuesday, the S&P 500 was up about 0.6% to 2067 (rounded).
VIX was down about 10% to 12.85. I am surprised by the size of this down move (after big up moves for the 2-previous trading days), but it does show the options guys are happier today.
The yield on the 10-year Treasury Note rose to 2.29.
The UP move Tuesday exceeded my statistical parameters and suggests a down day tomorrow (correct about 62% of the time).
Statistical parameters show daily moves have been very small indicating a “calm before the storm” that often precedes a pullback. Frequent statistically significant days usually occur at a top, so a top is forming. This doesn’t have to be a big top and may just indicate a small retreat (say 5%) is coming. If the trend of big moves continues it will be very soon; if not, it could be January.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) rose to 54% at the close Tuesday. (A number above 50% is usually good news for the markets.) New-lows outpaced New-highs Tuesday. The spread (new-highs minus new-lows) was minus-4. (It was -107 Monday). The 10-day moving average of change in the spread was -11. In other words, over the last 10-days, on average, the spread has decreased by 11-each day.
Internals remained 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 HOLD Tuesday. Only the Price indicator remains positive. Others are neutral, but it was nice to see the VIX fall for a change. That’s generally good for stocks.
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): HOLD
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.
ENSCO ANALYSIS FROM THE STREET.COM
http://www.thestreet.com/story/12968993/1/ensco-esv-stock-hits-52-week-low-as-oil-prices-hit-four-year-low.html?puc=yahoo&cm_ven=YAHOO
I will sell ENSCO as a tax loss strategy this year to off-set gains and
minimize taxes.
