“The number of Americans filing new claims for
unemployment benefits fell last week, pointing to an improving labor market. Initial claims for state
unemployment benefits dropped by 17,000 to a seasonally adjusted 297,000 for
the week ended Nov. 29, the Labor Department said on Thursday.” Story at…
http://www.reuters.com/article/2014/12/04/us-usa-economy-idUSKCN0JI1EC20141204BEIGE BOOK (MarketWatch)
“U.S. economic activity increased in October and November, but lower oil prices were raising alarm in the Gulf of Mexico and Texas, according to a summary of economic conditions released Wednesday. The Beige Book, a collection of anecdotes about the economy, said that contacts in a number of the 12 Federal Reserve districts remained optimistic about the outlook.” Story at…
http://www.marketwatch.com/story/economic-activity-expanding-with-signs-of-optimism-beige-book-2014-12-03-1491020?dist=afterbell
SANTA RALLY (YahooFinance)
“Why the constant talk of a Santa rally? Well, December has been the strongest month historically, with an average gain of 1.5% since 1928 and 75% of Decembers finishing in positive territory…The truth is that the average December has actually been flat through the first half of the month and only shows exceptional performance in the last few trading days of the year.” Story at…
http://finance.yahoo.com/tumblr/blog-the-santa-rally-separating-fact-from-fiction-215717734.html
MARKET REPORT
Thursday, the S&P 500 was down about 0.1% to 2072 (rounded).
VIX was down about 0.7% to 12.38.
The yield on the 10-year Treasury Note dropped to 2.24.
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. So far, there has not been a continued rash of big moves, but there are other issues of concern.
RSI was back in the overbought range yesterday and has dropped to 68 today (70 is overbought). New-hi/new low data is showing divergence. In a healthy market, there should not be a large number of both new-highs AND new-lows. I’ll have to run some numbers. I don’t think this stat is yet in extreme territory; but it is extended and that is worrisome.
On the good news front: Market Internals are once again positive.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) was 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 +43. (It was +118 Wednesday). The 10-day moving average of change in the spread was +3. In other words, over the last 10-days, on average, the spread has increased by 3-each day.
Internals switched to 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 is HOLD Thursday. The Price indicator is positive. Others are neutral.
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.
