“The number of Americans filing new claims for unemployment benefits fell more than expected last week, offering fresh evidence that the labor market was gathering steam. Initial claims for state unemployment benefits dropped 21,000 to a seasonally adjusted 283,000 for the week ended Feb. 14… A key measure of labor market slack - the number of job seekers for every open position - hit its lowest level since 2007 in December.” Story at…
http://www.reuters.com/article/2015/02/19/us-usa-economy-idUSKBN0LN19X20150219
PHILADELPHIA FED (Briefing.com)
“The Philadelphia Fed's Manufacturing Business Outlook Survey declined to 5.2 in February from 6.3 in January. The Briefing.com Consensus expected the index to increase to 9.0… The deceleration in manufacturing activities in the Philadelphia region mirrored the weakness reported in the New York region by the Empire Manufacturing Survey…” Details at…
http://www.briefing.com/Investor/Calendars/Economic/Releases/phil.htm
LEADING ECONOMIC INDICATORS
“In the six-month period ending January 2015, the leading economic index increased 2.3 percent (about a 4.6 percent annual rate), much slower than the growth of 4.1 percent (about an 8.4 percent annual rate) during the previous six months. However, the strengths among the leading indicators have remained widespread over the previous six months.” – Conference Board. Full notes here…
http://www.conference-board.org/data/bcicountry.cfm?cid=1
For a solid discussion of LEI with charts see this discussion from Doug Short at…
http://www.advisorperspectives.com/dshort/updates/Conference-Board-Leading-Economic-Index.php
MARKET REPORT
-Thursday, the S&P 500 was down 0.1% to 2097 (rounded).
-VIX fell about 1% to 15.29.
-The yield on the 10-year Treasury Note rose to 2.12%.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) rose to 54% at the close Thursday. (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 +125. (It was +120 Wednesday). The 10-day moving average of change in the spread was +2. In other words, over the last 10-days, on average, the spread has INCREASED by 2-each day.
Internals remained neutral on the market, because advancing volume has been low recently
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 and VOLUME indicators are positive; VIX 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.
