“Economic activity in the services sector grew in January, data from the Institute for Supply Management showed Wednesday…[however]…The ISM employment index…slowed to 51.6 in January from 55.7.” Story at…
http://www.cnbc.com/id/102394460
ADP HIRING (USA Today)
“The labor market cooled off a bit to begin 2015, payroll processor ADP said Wednesday, as businesses added a still-solid 213,000 jobs in January... Mark Zandi, chief economist of Moody's Analytics, which helps ADP compile the report…[said]…’All indications are that the job market will continue to improve in 2015.’" Story at…
http://www.usatoday.com/story/money/2015/02/04/adp-report-for-january/22809191/
CRUDE OIL DROPS (Marketwatch)
“Benchmark U.S. crude-oil futures plunged by more than 6% on Wednesday, pushing prices below the $50 mark and undoing part of the monster rally that played out over the four previous sessions, as the nation’s stockpiles climbed more than expected.” Story at…
http://www.marketwatch.com/story/oil-retreats-from-highs-as-inventory-data-show-huge-build-2015-02-03?dist=countdown
It was down even more at the close.
MARKET REPORT
-Wednesday, the S&P 500 was DOWN about 0.4% to 2042 (rounded).
-VIX was up about 6% to 18.33.
-The yield on the 10-year Treasury Note fell to 1.75%.
Looking at the charts, it will be interesting to see if the S&P 500 can get past the 2060 level. 2060 doesn’t just look like resistance (an area that the market index is finding difficult to exceed); it looks like a brick wall. The S&P 500 has been higher than 2060, but it hasn’t stayed there and it has experienced 7-large, up- moves to that level with little or no follow-thru going all the way back to 21-November. I’ll feel more bullish if the Index can get thru the 2060 level. If not, it will be correction time again.
The internals remained positive and one has to be optimistic on the technical data, but Bob Pissani named 4- market stressors: Oil, Base Metals, Bond Yields, Europe. Unless they improve, I think a correction is very probable. For Bob Pisani commentary on CNBC see…
http://video.cnbc.com/gallery/?video=3000351849
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) dropped to 55% 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 +102. (It was +167 Tuesday). The 10-day moving average of change in the spread was +3. In other words, over the last 10-days, on average, the spread has INCREASED by 3-each day.
Internals remained POSITIVE 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 is HOLD and it hasn’t changed much for some time. The PRICE indicator is positive; the VIX indicator is negative; Sentiment and Volume 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.
