“Crude-oil futures on Wednesday ended at a fresh five-year low Wednesday, dragged down by a surprise inventories increase and news the Organization of the Petroleum Exporting Countries cut its 2015 demand expectations for crude. Light, sweet crude for delivery in January declined $2.88, or 4.5%, to settle at $60.94 a barrel…” Story at…
http://www.marketwatch.com/story/crude-oil-futures-lose-gains-as-traders-book-profits-2014-12-10-11035147?dist=afterbell
US GROWTH LIKELY TO BE REVISED UPWARD (Reuters)
“U.S. economic growth was likely stronger in the third quarter than previously reported, according to data on Wednesday that showed spending on services expanding at a brisk clip. The Commerce Department's quarterly services survey, or QSS, showed services outlays increased much more vigorously than the government had assumed in its second estimate of gross domestic product published in November.” Story at…
http://www.reuters.com/article/2014/12/10/us-usa-economy-services-idUSKBN0JO1QT20141210
THOSE HINDENBURG OMENS ARE LESS MEANINGFUL THIS TIME(McClellan Report)
“Were it not for the concentrated damage to energy stocks resulting from the oil price slide, we would likely not be seeing an HO [Hindenburg Omen] signal now. Not all HOs end up seeing a big market collapse, but they do tend to show up ahead of every big market decline so they are worthy of some attention. To get a big slide now, the stock market is somehow going to have to fight off the bullish forces of positive seasonality, plentiful liquidity according to the breadth numbers, and more QE coming from other countries’ central banks. Plus we are now in the year following the mid-term elections, which is nearly always an up year. That is a tough package of forces for the stock market bears to fight against.” Get the entire
http://www.mcoscillator.com/learning_center/weekly_chart/capitulation_not_over_in_crude_oil/
McClellan noted. “Consider it [Hindenburg Omen] a warning, not a guarantee.” Video at…
http://finance.yahoo.com/blogs/talking-numbers/this-rare-indicator-is-pointing-to-disaster-225834766.html
I described the Hindenburg Omen on 5 December at...
MARKET REPORT
Wednesday, the S&P 500 was down 1.6% to 2026 (rounded).
VIX was UP about 25% to 18.55.
The yield on the 10-year Treasury Note dropped to 2.16.
STATISTICALLY SIGNIFICANT DAY
Wednesday was statistically-significant in my system, because the size of the day’s move was larger than the recent normal as measured by standard deviation from the norm. That implies Thursday would be an up-day about 62% of the time.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) was 45% 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-156 . (It was -140 Tuesday). The 10-day moving average of change in the spread was minus-32. In other words, over the last 10-days, on average, the spread has decreased by 32-each day.
New-high/new-low stats are still headed down and that is generally a bad sign. Internals remained negative 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 – INDICATORS DETERIORATING
The long-term NTSM system analysis remained HOLD Wednesday. Only the VIX indicator is positive. Other indicators remain neutral, but the NTSM analysis could produce a sell signal soon if the market continues to fall.
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--
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.
