“In a note to clients on Tuesday, Credit Suisse analyst Andrew Garthwaite took his mid-year and year-end forecasts for the S&P 500 down to 2,100 and 2,150, respectively. On Monday, the S&P 500 closed at 2,046. So Garthwaite expects that gains through the end of this year will be just 5%...” Story at…
http://www.businessinsider.com/credit-suisse-cuts-sp-500-targets-2015-2
GREEK SOLUTION? PERHAPS (CNBC)
“Greece has reached an agreement, in principle, with the European Union to stay in an EU bailout program, a source familiar with the matter told CNBC Wednesday.” Story at…
http://www.cnbc.com/id/102376511
BANK STOCKS UNDER STRESS (CNBC)
“Bank stocks have had a tough start to 2015 and could face even more difficult sledding should current conditions hold up. Analysts have soured on the sector amid anticipation that interest rates are going to stay lower than many in the market had expected, and as the regulatory vise tightens on those banks considered a danger to the financial ecosystem and the economy as a whole.” Story at…
http://www.cnbc.com/id/102413881
If the banking sector drops and if analyst predictions for lower oil are accurate, can the broader markets hold up? Maybe not.
RUSSELL 2000 HAS TO BREAK OUT…OR ELSE
The Russell 200 really needs to break out to the
upside. It has been stalled near a top
for almost a year. While it’s possible for the S&P 500 to move up and leave
the Russell behind, it is not likely. Conversely, if the Russell can’t make new
highs I think a correction is likely. The problem is this condition has
persisted for about a year so it’s hard to claim a correction is imminent. MARKET REPORT
- Wednesday, the S&P 500 was unchanged at 2069 (rounded).
-VIX fell about 2% to 16.96.
-The yield on the 10-year Treasury Note rose to 2.02%.
STILL WATCING THE CHARTS (REPEATING THIS UNTIL IT RESOLVES)
The S&P 500 made it to 2069 Tuesday and remained there Wednesday. The 2060’s have been a resistance area so this is a mildly bullish signal. Let’s see if the S&P 500 can make a new high. If Greece now has an agreement for a renegotiation of debt, then perhaps there will finally be a significant push higher.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) rose to 54% 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 +76. (It was +48 Tuesday). The 10-day moving average of change in the spread was minus-15. In other words, over the last 10-days, on average, the spread has DECREASED by 15-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 is BUY. The PRICE and VOLUME indicators are positive; VIX & Sentiment are neutral. The more important BUY signal was in late October after the bottom and more recently 2-days after the mini-bottom on 20 January. Stock market direction from here is likely to be influenced by news as much as technical indications.
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.) I’ll be following this closely to see if the call works out. As noted yesterday, some Pros disagree. I have no intention of remaining in smaller caps if they don’t outperform the S&P 500. So far, they are 1% ahead in February.
