“The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning. U.S. commercial crude inventories increased by 4.5 million barrels last week, maintaining a total U.S. commercial crude inventory of 448.9 million barrels, the ninth consecutive week of a higher total than at any time in at least 80 years.” Story at…
http://247wallst.com/energy-economy/2015/03/11/crude-price-battered-after-another-huge-inventory-increase/
More from CNBC…
"The fear of global supply glut that sent crude prices to six-year lows continues to hang over the market," said Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut. "We have not seen signs of enough lower production resulting from capital spending and drilling cuts." Story at…
http://www.cnbc.com/id/102494157
My cmt: The general feeling seems to be that oil will fall into the low 40’s. That seems likely and it will probably take the S&P 500 down with it. S&P 500 earnings would be up 8% without the oil companies; instead they are up only 1%.
MARKET REPORT
-Wednesday, the S&P 500 was down about 0.2% to 2040.
-VIX was up about 1.1% to 16.87. (VIX is not rising too quickly and that seems to be signaling that the markets may not fall much further.)
-The yield on the 10-year Treasury Note was down to 2.11%.
I moved mostly out of the S&P 500 and into small cap stocks via the Dow Jones US Completion Total (DWCPF) at the end of January. The DWCPF includes most stocks except the S&P 500. Since 1 Feb, the DWCPF is now 3.2% ahead of the S&P 500. On the other hand, International stocks (EFA) are underperforming the S&P 500 by about the same amount including currency adjustments.
PULLBACK?
Wednesday the S&P 500 again closed close to the lower trend line. RSI is now oversold at 30. Based on yesterday’s (Tuesday’s) data, Wednesday looked like it might become a buy for short term traders. At the end of the day Wednesday, traders sold off the S&P 500 in the last hour of trading and that is never a good sign for the bulls so perhaps the market will go a bit lower before the market turns up.
My guess is still that the S&P 500 will not drop below the 200-dMA (2002) and that is about 1.9% lower than today’s close. Short term calls are mostly educated guess-work so we’ll see. It might fool me and head up tomorrow.
Once again: We might have a better handle on the trend after tomorrow.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) remained 44% at the close Wednesday. (A number below 50% is usually BAD news for the markets.) New-lows outpaced New-highs Wednesday. The spread (new-highs minus new-lows) was minus -70. (It was -104 Tuesday). The 10-day moving average of change in the spread was minus-21. In other words, over the last 10-days, on average, the spread has DECLINED by 21-each day.
Internals remained negative on the market and stabilized somewhat – another indication that the bottom may not be too far away if it hasn’t already occurred.
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 remained HOLD. The PRICE indicator is positive, but just barely. VIX and SENTIMENT indicators are neutral, although sentiment remains extremely high. VOLUME is now negative.
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. The S&P 500 is now down 3.6%
from the top – not much in the grand scheme.
