“The ISM Non-manufacturing Index increased to 59.3 in November from 57.1 in October…The market generally doesn't pay much attention to the services index because the services sector is less cyclical than the manufacturing sector. To that end, October marked the 57th consecutive month in which economic activity in the non-manufacturing sector has expanded.” Details and charts at…
http://www.briefing.com/Investor/Calendars/Economic/Releases/napmserv.htm
ADP PAYROLLS UP ((Reuters)
“U.S. private companies added workers at a fairly brisk clip in November and the services sector grew strongly, suggesting a slowing global economy is having a limited impact on domestic activity…Payrolls processor ADP said private-sector employment rose by 208,000 last month after increasing by 233,000 in October. Private payrolls have now advanced by more than 200,000 in seven of the last eight months.” Story at…
http://www.reuters.com/article/2014/12/03/us-usa-economy-idUSKCN0JH1IG20141203
BLACK FRIDAY HINDENBURG OMEN
“The Hindenburg Omen is a combination of technical factors that attempt to measure the health of the NYSE and, by extension, the stock market as a whole. The goal of the indicator is to signal increased probability of a stock market crash… While the market does not enter a crash or bear market after every cluster of Hindenburg Omen signals, every market crash or bear market has been preceded by a Hindenburg Omen… Given extended nature of the current advance, some weakness likely ahead.” Commentary at…
http://www.financialsense.com/contributors/chris-puplava/hindenburg-omen-black-friday
RAPIDLY FALLING OIL IS BAD
“…falling oil can be bullish, but collapsing oil tends to historically be very bearish. Many major corrections and bear markets have been preceded by oil in a precipitous fall.” Commentary at…
http://www.marketwatch.com/story/those-who-think-collapsing-oil-is-bullish-are-wrong-2014-12-02
$100 OIL IN 12-18-MONTHS (MarketWatch)
“Prominent oil investor and sometime-renewable-energy booster T. Boone Pickens predicted Tuesday that the plunging oil price would rebound to $100 a barrel in the next 12 to 18 months. Pickens also said he expects the Organization of the Petroleum Exporting Countries will eventually move to slash oil production, possibly in the first half of 2015.” Story at…
http://www.marketwatch.com/story/oil-tycoon-t-boone-pickens-predicts-return-to-100-a-barrel-2014-12-02
OFF TOPIC COMMENTARY
OPINIONS VS. FACTS (TownHall.com)
“Everyone seems to have an opinion about the tragic events in Ferguson, Missouri. But, as Daniel Patrick Moynihan used to say, "You're entitled to your own opinion but you're not entitled to your own facts."
Soon after the shooting death of Michael Brown, this 285-pound young man was depicted as a "gentle giant." But, after a video was leaked, showing him bullying the owner of a store from which he had stolen some merchandise, Attorney General Eric Holder expressed displeasure that the video was leaked. In other words, to Holder the truth was offensive, but the lie it exposed was not...
…Three different medical forensic experts -- one representing
Michael Brown's parents -- examined the physical facts. These facts included
the autopsy results, Michael Brown's DNA on the door of the police car and on
the policeman's gun, photographs of the bruised and swollen face of policeman
Darren Wilson and the pattern of blood stains on the street where Brown was
shot. This physical evidence was hard to square with the loudly proclaimed
assertions that Brown was shot in the back, or was shot with his hands up,
while trying to surrender. But it was consistent with the policeman's
testimony.” - Thomas Sowell, Rose and Milton Friedman Senior Fellow, The Hoover
Institution, Stanford University. Commentary at…
http://townhall.com/columnists/thomassowell/2014/12/02/opinions-versus-facts-n1925838FYI: Thomas Sowell is black.
CHARLES BARKLEY SAYS FERGUSON RIOTERS ARE SCUMBAGS; BACKS
GRAND JURY (Washington Post)
“’The true story came out from the grand jury testimony,’
Barkley said told host Mike Missanelli. ‘I can’t believe anything I hear on
television anymore. And, that’s why I don’t like talking about race issues with
the media anymore, because they [the media] love this stuff, and lead
people to jump to conclusions. The media shouldn’t do that. They never do that
when black people kill each other.’He did, though, offer support for officers who work in black neighborhoods. “[W]e have to be really careful with the cops, because if it wasn’t for the cops we would be living in the wild, wild West in our neighborhoods,” he said. “We can’t pick out certain incidentals that don’t go our way and act like the cops are all bad….Do you know how bad some of these neighborhoods would be if it wasn’t for the cops?” – Charles Barkley, TNT(TV) Commentator, former NBA star. Story at…
http://www.washingtonpost.com/blogs/early-lead/wp/2014/12/02/charles-barkley-says-ferguson-rioters-are-scumbags-backs-grand-jury-decision/
MARKET REPORT
Wednesday, the S&P 500 was up about 0.4% to 2074 (rounded).
VIX was down about 4% to 12.35.
The yield on the 10-year Treasury Note remained 2.29.
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.
On a good note, new-hi/new-lo data reversed back to the upside today (more new-highs than new-lows) and that’s nice to see.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) remained 54% at the close Wednesday. (A number above 50% is usually good news for the markets.) In another reversal, new-highs outpaced New-lows Wednesday. The spread (new-highs minus new-lows) was +118. (It was minus -4 Tuesday). The 10-day moving average of change in the spread was minus-2. In other words, over the last 10-days, on average, the spread has decreased by 2-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 is BUY Wednesday. Price and VIX indicators are positive. Others are neutral, although Sentiment is a whisker from a negative signal.
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.
