“January meeting minutes released Wednesday show a Fed Open Market Committee concerned over its credibility and the path it should take toward normalizing monetary policy. Issue by issue, "some," "a few" or a "couple" voiced concerns about when the central banks should begin raising rates and how it should do so. Ultimately, though, "many" won out in determining that the days of cheap money would continue.” Story at…
http://www.cnbc.com/id/102435876
INDUSTRIAL PRODUCTION UP (USA Today)
“Industrial production increased 0.2% in January after decreasing 0.3% in December, the Federal Reserve said this morning…production is estimated to have advanced at an annual rate of 4.3%the fourth quarter of last year…” Story at…
http://www.usatoday.com/story/money/business/2015/02/18/industrial-production-capacity-utilization/23607065/
MARKET REPORT
-Wednesday, the S&P 500 was essentially unchanged at 2100 (rounded).
-VIX fell about 2% to 15.45.
-The yield on the 10-year Treasury Note dropped to 2.08%.
WATCING THE RUSSELL 2000
The Russell 2000 pushed up to 1228 Wednesday and that’s 3-consecutive moves above the prior stalled high so it looks like the Russell 2000 is breaking out of the 1-year long trading range. I’d still like to see it move higher, say above 1240, before I am convinced. For a Russell 2000 chart showing this stalled index See 11 Feb blog at… http://navigatethestockmarket.blogspot.com/2015/02/stocks-downgradedgreek-solution.html
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) declined to 53% at the close Wednesday. (A number above 50% is usually GOOD news for the markets.) New-highs outpaced New-lows Wednesday. The spread (new-highs minus new-lows) was +120. (It was +133 Tuesday). The 10-day moving average of change in the spread was minus-5. In other words, over the last 10-days, on average, the spread has DECREASED by 5-each day.
Internals remained 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
Wednesday, the NTSM analysis switched to HOLD. The PRICE indicator is positive; Volume, VIX and Sentiment indicators are neutral, although sentiment remains extremely high.
I remain fully invested at 50% invested in stocks in the long-term portfolio. 50% is conservative, but appropriate for a retired guy.
My position in the S&P 500 is very small now. I have invested in the Dow Jones US Completion Total (^DWCPF) instead, because that is the only small-cap choice in my retirement account. (The DWCPF includes all stocks EXCEPT the S&P 500.) I’ll be following this closely to see if the call works out. Some Pros disagree. Since 1 February, the DWCPF is 1.6% ahead of the S&P 500.
