"The labor market isn’t just healing — it is red hot with nearly 5 million jobs available," Bank of Tokyo-Mitsubishi's Chris Rupkey said. "Slack in the economy isn't just going away; it's all but evaporated…Ian Shepherdson at Pantheon Macro wrote: "We have argued since the crash of 2008 that the economy cannot recover properly until the small-business sector normalize(s). And, finally, it has." Story at...http://www.businessinsider.com/economist-nfib-jolts-reaction-2015-1
SMALL BUSINESS OPTIMISM (Advisor perspectives)
“The latest issue of the NFIB Small Business Economic Trends is out today…The index is now at the 63.2 percentile in this series and at a new post-recession high, its highest level since October 2006.” Story at…
http://www.advisorperspectives.com/dshort/updates/NFIB-Small-Business-Optimism-Index.php
MARKET REPORT
-Tuesday, the S&P 500 was down about 0.26% to 2023 (rounded).
-VIX was up about 5% to 20.56.
-The yield on the 10-year Treasury Note fell slightly to 1.90%.
With oil, copper, iron, etc. falling, it seemed to me that a commodity company like Alcoa would be more important than usual. Alcoa reported 4th-quarter earnings yesterday and its earnings and revenue increased; that looked like really good news to me, but it was not to be. The S&P 500 was up nearly 1% around 11AM. It declined thereafter to finish down about 0.3%. That’s a pretty big turnaround and technicians call it an “outside bearish reversal” (i.e., the highs and lows were both above and below yesterday’s levels). It is not a good signal for stocks, but the news is not all bad.
RSI, (SMA-14)
Relative Strength (that measures the size of up vs. down moves) cycles between tops and bottoms on a 14-day moving average basis. It is close to oversold so it looks like the downturn is likely to reverse before it swings into a full-blown correction.
We’ll see; I have been optimistic recently, but the data is turning down.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) fell to 48% at the close Tuesday. (A number below 50% is usually BAD news for the markets.) New-highs outpaced New-lows Tuesday. The spread (new-highs minus new-lows) was +81 (It was +34 Monday). The 10-day moving average of change in the spread was down to minus-13. In other words, over the last 10-days, on average, the spread has DECREASED by 13-each day.
Internals switched to 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
Tuesday, the long-term NTSM system analysis remained HOLD. The VIX and VOLUME indicators remain negative; Price is positive; other indicators are neutral.
I remain fully invested at 50% invested in stocks. 50% is conservative, but appropriate for a retired guy.
