“The number of people who sought new U.S. unemployment benefits in late January fell to its lowest level in 14 years, government data showed Thursday. Initial jobless claims declined to 265,000 in the seven days ended Jan. 24 from a revised 308,000…” Story at…
http://www.marketwatch.com/story/jobless-claims-drop-to-14-year-low-2015-01-29
The drop was much bigger than predicted by economists.
OIL FUTURES AT THE LONG TERM TREND LINE
Chart from CNBC Video
The long term trend is around 45 so we might expect a
bounce in crude; but supplies remain high and production is not coming down.
I’d expect oil to fall further. I think this is a long-term positive for the
stock market.
MARKET REPORT
-Thursday, the S&P 500 was up about 1% to 2021 (rounded).
-VIX was down about 8% to 18.76.
-The yield on the 10-year Treasury Note increased to 1.76%, preferring stocks.
The action in the markets in the afternoon gave some evidence that yesterday was a bottom to go along with my comments yesterday. I must say the charts don’t instill confidence, especially since December, because Nasdaq 100 has made a series of lower highs. Still, there was late day buying today and the S&P 500 fell to less than 1% above its 200-day moving average in the morning before turning up. It looks bullish to me for the short term. Longer-term it’s worrisome. Let’s hope the Russell 200 can break out to the upside, because that might suggest improvements in other indices.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) improved to 55% 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 +66. (It was +230 Wednesday). The 10-day moving average of change in the spread remained +15. In other words, over the last 10-days, on average, the spread has INCREASED by15-each day and that’s still pretty good.
Internals switched to neutral on the market; up volume is falling on a 10-day basis.
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 NTSM analysis is HOLD. The PRICE indicator is positive; VIX is negative; other indicators are neutral.
MY INVESTED STOCK POSITION
I remain fully invested at 50% invested in stocks in the long-term portfolio. 50% is conservative, but appropriate for a retired guy.
