NASDAQ 5000 (USA Today)
“Slowly but surely, the Nasdaq composite index is creeping closer to 5000 – the level it last pierced fifteen years ago. At Thursday’s close of 4924.70, the tech-stock barometer only needs to rise another 1.5% to hit the 5K mark. Fifteen years is a long time… But still, don’t forget what the philosopher George Santayana said: Those who cannot remember the past are condemned to repeat it.” Story at…
http://americasmarkets.usatoday.com/2015/02/20/grab-your-parachute-here-comes-nasdaq-5000/
NASDAQ 5000
IS THE SECULAR BEAR DEAD? NASDAQ POISED TO BREAK 5000 (TD Ameritrade Market news)
“…[The Nasdaq Composite] is tantalizingly close to those historic highs...That would represent one of the most extraordinary recoveries from a bubble bust in stock market history… Consider:
-- It took the Dow a quarter-century to reach its 1929 peak again after it lost 89% of its value in the Crash and the Great Depression...
-- The Nikkei 225 hit an all-time bubble high near 39,000 on Dec. 29, 1989, but didn't reach its bear-market low above 7,500 until March 2009. It hasn't seen 20,000 since the year 2000.
If the Nasdaq -- the last major U.S. index to recover its all-time highs -- were to pole vault the 5,000 milestone, would that be a confirmation that we're in a secular bull market? "Investors tend to look at the previous high as being an important level. It works in the Olympics but not in the market," Meisels [Ron Meisels, founder and president of Montreal-based Phases & Cycles] told me. "For the stock market, [what matters is] not the previous high, but the trend." Story at…
https://research.tdameritrade.com/grid/public/markets/news/story.asp?docKey=1-SN20140912008233&
NASDAQ 5000
The Nasdaq Composite is the last major index that has not broken the prior high (5050) achieved in the dot.com bust. It would officially end the secular bear market. Whether that “end” will be sustainable remains to be seen, but it could lead to some new money piling in if folks on the sidelines decide the answer is yes. I doubt it, but we’ll see. The retail investor has little cash on the sidelines now according to the pundits.
SOME BONDS CAN WORK WHEN YIELDS RISE (MarketWatch)
“…bonds’ performance during what is widely thought to be the worst sustained period for bonds in U.S. history, the period from 1965 through 1982…[were actually good]…Treasury yields almost tripled. Believe it or not, intermediate-term bonds held their own over this period: A portfolio of intermediate-term U.S. Treasurys, constructed to have a constant maturity of five years, gained 5.8% annualized from 1965 through 1982, according to data from Ibbotson (a division of Morningstar). That’s almost as good as the S&P 500’s 5.9% annualized dividend-adjusted return over the same period.” – Mark Hulbert. Commentary at…
http://www.marketwatch.com/story/heres-the-income-portfolio-you-want-to-own-when-interest-rates-rise-2015-02-20?link=MW_popular
MARKET REPORT
-Monday, the S&P 500 was unchanged at 2110 (rounded).
-VIX rose about 2% to 14.56.
-The yield on the 10-year Treasury Note dropped to 2.06%.
RSI reached overbought territory on Friday at 84 and fell slightly to 81 Monday. This can presage pullbacks…or not. The markets can remain oversold for a while. After looking at this issue further, I think the S&P 500 probably won’t advance much before we see a small pullback, say in the 5-6% area.
Volume remained low again today and was about 10% below the monthly average.
RECESSION? NOPE
XLI is outperforming the S&P 500 on every time frame from 2-weeks to 6-months so investors are not concerned about recession at this point. If they were, they would be selling the XLI which contains industrial cyclical stocks.
I’ve been watching the RUSSELL 2000 for a while. Looks like I am not the only one…
RUSSELL 2000 BREAKING OUT (YahooFinance)
“Craig Johnson, senior technical research strategist at Piper Jaffray and president of the Market Technicians Association…sees the past year as being a consolidation phase for the Russell 2000’s stock price. “We are starting to break topside out of that one-year consolidation range,” he said. “That is absolutely bullish for equities and a really positive sign that breadth of the market is improving. It is really setting us up for the next leg higher.” Story at…
http://finance.yahoo.com/blogs/talking-numbers/the--absolutely-bullish--sign-for-stocks-224313918.html
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) remained 54% at the close Monday. (A number above 50% is usually GOOD news for the markets.) New-highs outpaced New-lows Monday. The spread (new-highs minus new-lows) was +141. (It was +150 Friday). 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 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
Monday, the NTSM analysis remained HOLD. Only the PRICE indicator is positive; VIX, VOLUME 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.) Some Pros disagree, but so far it has worked out. Since I made the call, at the end of January, the DWCPF is 1.7% ahead of the S&P 500.
I am looking at 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 fund available in my retirement account. It’s the “I”-fund. I sold my foreign investments some time ago and it's probably over-due to get back in.
