“Orders for durable goods unexpectedly dropped in February, a sign the slowdown in global growth may be weighing on American manufacturers. Bookings for goods meant to last at least three years declined 1.4 percent after a 2 percent gain in January that was smaller than previously estimated, data from the Commerce Department showed Wednesday in Washington.” Story at…
http://www.bloomberg.com/news/articles/2015-03-25/durable-goods-orders-in-u-s-unexpectedly-dropped-in-february
CRUDE INVENTORIES (fuelfix)
“U.S. crude oil inventories grew by 8.2 million barrels this week, according to data compiled by the U.S. Energy Information Administration. The build brings the total amount of crude the U.S. has in storage to 466.7 million barrels, a record in weekly data stretching back to 1982. In monthly data, crude oil inventories are at the highest level since 1930.” Story at…
http://fuelfix.com/blog/2015/03/25/gain-in-crude-inventories-beats-expectations-again/
Why were oil stocks up today? Last week’s inventory build was 9.6-million barrels so perhaps the experts are guessing the rate of rise is declining since this week’s build was “only” 8.2-million barrels.
INVESTING THEMES FOR 2015 – JIM PAULSON, WELLS MGT
Excerpts from Canterbury Consulting Annual Investment Forum 2015 presentation by Jim Paulson.
“(1) Bond Themes for 2015
- Stay underweight duration and overweight lower quality
(2) Stock Themes for 2015
- Stay overweight stocks. There may be a near-term
correction, but the long-term outlook remains good
- Diversify out of the U.S. and into resource-based economies, economies with
accommodative monetary policy, and emerging markets
- In the U.S., investors should overweight staples,
energy, materials, and small cap stocks.” From Canterbury Consulting Annual Investment
Forum 2015 at…http://www.canterburyconsulting.com/media/1175/2015-annual-investment-forum.pdf
See yesterday’s Blog for some Bond ideas that meet Paulson’s themes.
PLEASE TELL YOUR FELLOW INVESTORS ABOUT THIS BLOG…
…especially Government employees/retirees. I think the TSP information should be valuable. I need more readers!
MARKET REPORT
-Wednesday, the S&P 500 was down about 1.5% to 2061 at the close.
-VIX was up about 13% to 15.44.
-The yield on the 10-year Treasury Note rose to 1.93%. (The Bond Ghouls bucked the trend today; a rising yield is curious since it indicates selling in bonds.)
Today’s big selloff was uniformly down all day. The Durable Goods data was a big disappointment and it was released before the open. It’s possible that traders were adjusting risk based on the news, but that is really anyone’s guess.
CORRECTION? (ANALYSIS BASED ON S&P 500 DATA)
As of today’s close, only 7-days in the last 20 have been positive and that is fairly rare and sometimes indicates a bottom or near bottom. Today was statistically significant on the S&P 500 and a reversal in direction is suggested about 62% of the time; in other words, the odds favor that Thursday will be an up-day. The VIX popped higher Wednesday, but not that much higher given the big move in the Index. Statistically, Wednesday’s move wasn’t anywhere near big enough to indicate “panic.” The close today was slightly below the 50-dMA (0.3% under the 50-day) and only 2.6% above the 200-dMA.
All of the above suggests a quick reversal or perhaps a little more downside ahead. If not, that long elusive correction may be at hand; but I am not convinced the correction is here yet.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) fell 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 +69. (It was +85 Tuesday.) The 10-day moving average of change in the spread was +14. In other words, over the last 10-days, on average; the spread has INCREASED by 14-each day.
Internals SWITCHED TO 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 2014, using these internals alone would have made a 9% return vs.
13% 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, nearly straight-up year like 2014.
NTSM
Wednesday, the NTSM analysis switched to HOLD. The PRICE indicator is positive. VIX, VOLUME and SENTIMENT indicators are neutral, although (as always) sentiment remains extremely high.
MY INVESTED STOCK POSITION
I remain fully invested at 50% invested in smaller cap-stocks
in the long-term portfolio with some international stocks. 50% is conservative,
but appropriate for a conservative retired guy.The Dow Jones US Completion Index (all stocks except the S&P 500) continues to outperform the S&P 500. Since February it is 3.5% ahead of the S&P 500.
THRIFT SAVINGS PLAN (TSP) MEMBERS
My TSP Allocation: 50%-G; 10%-C; 25%-S; 15%-I. (50% cash is too high for non-retirees.)
