“The index of U.S. leading indicators increased in December, extending its rise to four straight months, as the world’s largest economy expanded. The Conference Board’s index, a gauge of the outlook for the next three to six months, increased 0.5 percent in December, after a revised 0.4 percent gain in November…” Story at…
http://www.bloomberg.com/news/2015-01-23/leading-indicators-in-u-s-increase-for-fourth-straight-month.html
CHICAGO FED NATIONAL ACTIVITY INDEX (Dow Jones)
“A widely watched snapshot of economic activity in the manufacturing-heavy Midwest signaled below-normal growth last month, pulled down by a decline in production. The Chicago Fed National Activity Index fell to -0.05 in December from November's +0.92. A negative number points to economic expansion below the historical trend.” Story at….
http://news.morningstar.com/all/dow-jones/us-markets/201501235945/chicago-fed-national-activity-index-flashes-below-normal-growth.aspx
ADS INDEX ALSO DOWN
The The Aruoba-Diebold-Scotti business conditions index, published by the Philly Fed, also moved down to flat. ADS Index at…
http://www.philadelphiafed.org/research-and-data/real-time-center/business-conditions-index/
Both the ADS Index and the CFNAI give current snapshots of the economy. As the name implies, Leading Indicators are designed to predict future economic activity so we might not worry too much about the FED data.
Q4 EARNINGS FROM FACTSET (Factset)
“With 18% of the companies in the S&P 500 reporting actual results for Q4 to date, more companies are reporting actual EPS above estimates (79%) and fewer companies are reporting actual sales above estimates (54%) compared to recent historical averages. However, the amount by which companies are reporting earnings above estimates (0.2%) is well below recent historical averages due to large downside earnings surprises reported by a small number of companies in the index... During the upcoming week, 142 S&P 500 companies (including 11 Dow 30 components) are scheduled to report results for the fourth quarter.” Fact Set Earnings report at…
http://www.factset.com/websitefiles/PDFs/earningsinsight/earningsinsight_1.23.15/view
BULL MARKET MAY LAST 8 OR 9 MORE YEARS (Financial Sense)
“In a recent Financial Sense Newshour podcast, Jeffrey Saut, the Chief Investment Strategist at Raymond James, made a very bullish case for US stocks over the long-term and said that slowing global growth has much less of an impact on the US than people think. He also addressed whether US markets are overvalued and reiterates his belief that we may only be halfway through a long-term secular bull market that started in 2009.” – Jeffery Saut, Raymond James. Story at…
http://www.financialsense.com/contributors/jeffrey-saut/secular-bull-market
HOLY VOLATILITY, BATMAN!
Top to bottom in 2-weeks (3 Dec -13 Dec) followed by bottom to top in 2-weeks (15 Dec – 26 Dec) followed by top to bottom in 2-weeks (29 Dec -15 Jan). Now we’re seemingly headed nearly straight up. This is not normal market behavior. I wish I knew the meaning of it. I track a lot of market related stuff and the markets look pretty good right now, but the up and down movement is a worry.
MARKET REPORT
-Friday, the S&P 500 was down about 0.6% to 2052 (rounded).
-VIX rose about 1.6% to 16.66.
-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) fell to 51% 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 262. (It was +235 Thursday). The 10-day moving average of change in the spread declined to +6. In other words, over the last 10-days, on average, the spread has INCREASED by 6-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 NTSM analysis is HOLD. The PRICE indicator is positive; the VIX indicator 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. I added QLD and XIV as a trade with some excess cash on 20 January to the trading portfolio. (Overall I am closer to 60% invested right now since I apply some cash to trading positions when I am able to identify bottoms, such as recently published after the low on 15 Jan.)
