“The number of Americans filing new claims for jobless benefits fell more than expected last week while activity in the services sector hit a six-month high in March, underscoring the economy's solid fundamentals despite a recent softening in growth…Thursday's upbeat reports, however, implied the slowdown would be temporary.” Story at…
http://www.cnbc.com/id/102537002
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MARKET REPORT
-Thursday, the S&P 500 was down about 0.24% to 2056 at the close.
-VIX was up about 1.4% to 15.66.
-The yield on the 10-year Treasury Note rose to 2.01%. (The Bond Ghouls bucked the trend; a rising yield is curious since it indicates selling in bonds at the same time stocks have been under pressure.)
XLI UNDERPERFORMING – RECESSION WORRIES
I use the Industrial Select Sector SPDR Etf (XLI) compared to the S&P 500 as a proxy for investor sentiment regarding recession. XLI is a basket of cyclical stocks that should fall early if investors fear a recession. At the present time the XLI is underperforming the S&P 500 on nearly every time frame from 10 to 100-days. Investors are worried about the economy.
4-DOWN DAYS IN A ROW (Chad Gassaway’s Tumblr)
“The S&P 500 [closed] lower for a fourth consecutive session [Thursday]. After failing to do so in all of 2014, this is the third time in 2015 for this to occur. … should the bull market remain intact, recent history has shown that while these are generally not the exact bottom [they] do tend to take place near the bottom. Based on this information, this pullback appears far less scary when put into context though should we not see a rebound over coming sessions this would be very telling.” Commentary analysis and details at…
http://chadgassaway.tumblr.com/post/114672548763/what-happens-when-the-market-is-down-four-days-in
CORRECTION? (ANALYSIS BASED ON S&P 500 DATA)
As of Thursday’s close, there have still only been 7-days in the last 20 that have been positive and that is fairly rare and sometimes indicates a bottom or near bottom.
If the markets continue down tomorrow, the 200-dMA is a likely stopping point, but every pundit on CNBC suggested investors take some $ off the table by selling stocks. When everyone agrees on a course of action, it is usually best to do the opposite, so I am not selling…yet. The S&P 500 is only 2.7% below its top; that’s not much for all the fear-mongering. They may be right this time, but so far, VIX has not been rising very quickly so I am still skeptical that there will be a correction of more than 5 or 6%.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) fell to 51% at the close Thursday. (A number above 50% is usually GOOD news for the markets.) In a reversal, New-lows outpaced New-highs Thursday. The spread (new-highs minus new-lows) was minus-4. (It was +69 Wednesday.) The 10-day moving average of change in the spread was minus-6. In other words, over the last 10-days, on average; the spread has DECREASED by 6-each day.
Internals remained NEUTRAL on the market. If the % of stocks advancing had fallen below 50%, Internals would have been negative.
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
Thursday, the NTSM analysis remained 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 3.6% 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.)
