“The Bureau of Labor Statistics reported the strongest payroll additions in years. Employers added 321,000 jobs in November, a number far greater than the 230,000 economists were predicting…."If you don’t like this one nothing is going to make you happy," [said] PNC economists Stuart Hoffman…Total employment gains in September and October were [revised upward and] therefore 44,000 greater than what BLS — a division of the Department of Labor — previously reported.” Story at…
http://www.forbes.com/sites/samanthasharf/2014/12/05/jobs-report-u-s-economy-added-321000-jobs-in-november-unemployment-steady-at-5-8/
FACTORY ORDERS DOWN BUT OK (Briefing.com)
Factory orders fell, but that was attributed to falling oil prices and fewer orders for refineries so there was no bad news here. In fact, Briefing.com stated, “Unfilled orders growth should help boost production.” Story at…
http://www.briefing.com/Investor/Calendars/Economic/Releases/facord.htm
HOURLY EARNINGS UP 0.4% (Briefing.com)
“…those who already had jobs were able to demand a 0.4% increase in average hourly earnings. That tells us that the number of available qualified workers is diminishing, which is forcing employers to pay their workers more money to keep them at their current job.” Story at…
http://www.briefing.com/Investor/Calendars/Economic/Releases/employ.htm
HINDENBURG OMEN (Yahoo Finance)
“In order for the Hindenburg Omen to hold true, says McClellan, three events must occur in the same day:
-The number of new 52-week highs and 52-week lows are greater than 2.8 percent of the advances and declines in the New York Stock Exchange.
-The NYSE Composite Index is above the level it was 50 trading days ago.
-The McClellan Oscillator (an indicator of whether a market is overbought or oversold) is below zero.
“If you get all of these events on the same day then we have this Hindenburg Omen. It’s good for 30 days, but it gets invalidated anytime the McClellan Oscillator goes back positive,” McClellan added…“We had one of those earlier this week, it was invalidated…”
http://finance.yahoo.com/blogs/talking-numbers/this-rare-indicator-is-pointing-to-disaster-225834766.html
My cmt: I looked at new high new low data yesterday and set up all the equations to track new-hi/new-lo data from the divergence concern I mentioned yesterday. (Too many new-highs AND new-lows.) The current value is stretched historically and, as of today, Friday, suggests a short term pullback. On longer term metrics (50-dEMA) it is nowhere near crisis levels. In other words, it is more likely that we’ll see a small pullback rather than the “TOP” many have been predicting even if the “Hindenburg” comes back any time soon.
MARKET REPORT
Friday, the S&P 500 was up about 0.2% to 2075 (rounded).
VIX was down about 5% to 11.82. Numbers below 12 have indicated trouble for the S&P 500 in 2013 and 2014. That is not a canary in the coal mine though, because VIX dropped down to 10 prior to the last crash.
The yield on the 10-year Treasury Note rose to 2.30.
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. On the negative side of the ledger, RSI was back in the overbought range 2-days ago and has dropped to 69 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 as has been the norm recently. (See the Hindenburg discussion above.)
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) was 53% at the close Friday. (A number above 50% is usually good news for the markets.) New-highs outpaced New-lows Friday. The spread (new-highs minus new-lows) was +36. (It was +43 Thursday). 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 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 is BUY Friday. Both VIX and Price indicators are 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.
