“Initial jobless claims last week increased by the highest amount in roughly two years, according to the latest data from the Department of Labor. The numbers, released Thursday, show those filing for unemployment last week jumped by 31,000 compared with a week earlier, pushing up the total number of individuals reporting to 313,000 from 282,000.“ Story at…
http://time.com/money/3723932/jobless-claims-surge/
It’s only 1-week’s data so no cause for alarm.
DURABLE ORDERS INCREASED (Bloomberg)
Orders for durable goods rose in January for the first time in three months, showing manufacturing may be starting to stabilize as companies look beyond weaker global markets and cutbacks among energy producers. Bookings for goods meant to last at least three years increased 2.8 percent after a revised 3.7 percent decrease the prior month…” Story at…
http://www.bloomberg.com/news/articles/2015-02-26/orders-for-u-s-durable-goods-increased-2-8-in-january
OIL PRODUCERS RUNNING OUT OF SPACE (CNBC)
“Oil supply running ahead of demand hasn't just pressured prices, it's also filling up storage space, potentially pushing crude toward another leg down. "We're going to see pretty fast inventory builds over the next few weeks," Francisco Blanch, head of commodity research at Bank of America-Merrill Lynch, told CNBC Wednesday, noting that global supply is running around 1.4 million barrels a day above demand. "If you run out of space, prices tend to react a lot more violently to adjust that supply and demand imbalance and that's what we expect over the next few weeks," he said, forecasting both WTI and Brent will fall toward $30 a barrel…” Story at…
http://www.cnbc.com/id/102453323
TIME TO BUY GOLD (CNBC)
“Jeff Kilburg, KKM Financial, makes the case for a breakout coming in gold.” –CNBC video at…
http://finance.yahoo.com/video/pro-calls-bottom-gold-192300588.html
It used to be a normal recommendation that a diversified portfolio maintain about 5% in gold. That went to the wayside during the dotcom.era when stocks were the only place to be. It seems like a reasonable move now, since the GLD ETF appears to have bottomed so I’ll start with a small position in GLD and only add more later if the trade is going well. Of course, Gold prices could go down, so I’ll sell if it drops more than a couple of % below the current price of around 116. Gold may be derailed by rising interest rates and/or a strengthening dollar. Gold right now is a contrarian play.
TIME TO BUY EUROPE (CNBC)
“Gemma Godfrey, Brooks MacDonald head of investment strategy, makes the case for Europe's markets to drive upside going forward.” Video at…
http://finance.yahoo.com/video/best-place-invest-europe-vs-174100954.html
SHIFTING RETIREMENT ACCOUNT ALLOCATIONS
The international choice in my retirement fund is the EAF (Europe and Far East) ETF. It does look like the EAF bottomed back in early January. Since the TSP (my retirement accounts) limits the number of shifts in allocation to 3-per month, changing now (at the end of the month) leaves options open for next month. I am shifting to S-25% (small caps); C-10% (S&P500); I-15% (international-EAFE); G-50% (cash/mix - about 2% yield) tomorrow.
MARKET REPORT
-Thursday, the S&P 500 was DOWN about 0.2% to 2111 (rounded).
-VIX rose about 0.5% to 13.91.
-The yield on the 10-year Treasury Note rose to 2.03%.
RSI fell to 75 Thursday – a neutral indication for the short term.
Volume remained low again today, Thursday, and was about 11% below the monthly average on the NYSE. This isn’t a bullish indication though I can’t say when the market may break down based on this stat.
A pullback is getting closer, but I can’t tell whether it’s a few days away or a few weeks. Any pullback would be a routine 5-6% normal retreat unless the news get’s bad.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) remained 57% at the close Thursday. (I had a typo yesterday.) (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 +111. (It was +135 Wednesday). The 10-day moving average of change in the spread was +4. In other words, over the last 10-days, on average, the spread has INCREASED by 4-each day.
Internals remained neutral on the market, but they are
not trending one way or another so it is wait and see time.
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
Thursday, the NTSM analysis remained HOLD. The PRICE indicator is positive; VIX, VOLUME and SENTIMENT indicators are neutral, although sentiment remains extremely high.
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.
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.) Some Pros disagree, but so far it has worked out. Since I made the call, at the end of January, the DWCPF is 1.8% ahead of the S&P 500.
I will shifting some funds into the EAF ETF (Europe and Far East) at the end of the month. The US is expensive compared to the rest of the world and the EAF bottomed 9 Jan 2014. This is the only foreign investment available in my retirement account. I’ve noted the allocation above.
