Federal Reserve officials are on track to start raising short-term interest rates later this year, even though long-term rates are going in the other direction amid new investor worries about weak global growth, falling oil prices and slowing consumer price inflation. After their next policy meeting on Jan. 27-28, officials are likely to repeat in their statement that they can “be patient” about rate increases. That means no moves for at least the next two meetings—or not until June at the earliest...” Story at…
http://www.marketwatch.com/story/fed-officials-are-on-track-for-2015-rate-hike-2015-01-19
CHINA GDP SLOWEST IN 25-YEARS (WSJ)
China’s economic growth slowed to 7.4% in 2014, downshifting to a level not seen in a quarter century and firmly marking the end of a high-growth heyday that buoyed global demand for everything from iron ore to designer handbags.” Story at…
http://www.wsj.com/articles/china-gdp-growth-is-slowest-in-24-years-1421719453?tesla=y
JOHNSON AND JOHNSON (CNBC)
“Johnson & Johnson reported lower-than-expected quarterly sales as a stronger dollar offset higher sales of the Band-Aid maker's new drugs and older treatments. The company's international sales fell about 7 percent to $9.65 billion in the fourth quarter, accounting for about half of its total sales. The dollar gained nearly 13 percent against a basket of major currencies in 2014, its strongest performance since 1997.” Story at…
http://www.cnbc.com/id/102345637
This is the concern for the S&P 500. Large companies that do business overseas may be hurt by the strong dollar.
NYSE STOCKS ABOVE 200-dMA (Index Indicators)
Downturns the size of the current one have frequently turned upward when the stock above their 200-day moving average has reached 2-standard deviations below the norm. That’s where they were last week. Let’s hope they continue upward.
Chart from…MARKET REPORT
-Tuesday, the S&P 500 was up about 0.2% to 2023 (rounded).
-VIX fell about 5% to 19.89.
-The yield on the 10-year Treasury Note fell to 1.79%.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) rose to 50.3% at the close Tuesday. (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 +119 (It was +152 Friday). The 10-day moving average of change in the spread rose to +12. In other words, over the last 10-days, on average, the spread has INCREASED by 12-each day.
Internals switched to positive on the market. There is a concern though, because both new-highs and new-lows are high and that is not a good sign for a healthy 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
Earlier today I assigned a BUY rating based on technicals associated with the low last Thursday, 15 Jan, and the market data that followed thru today.
NTSM Indicators follow: The VIX indicator remains negative; the Price indicator is positive; other indicators are neutral. Caution is needed though. NTSM could reverse quickly if the market turns down. (That is usually the case near a low.)
MY INVESTED STOCK POSITION
I remain fully invested at 50% invested in stocks. 50% is
conservative, but appropriate for a retired guy. I added QLD and XIV as a trade with some
excess cash. I’ll cover quickly, if the
stock market falters.
