ISM SERVICES (Reuters)
“The Institute
for Supply Management on Wednesday said its services index was 56.9 in
February, up slightly from 56.7 in January.” Story at…http://www.reuters.com/article/2015/03/04/us-usa-economy-services-idUSKBN0M01OD20150304
CRUDE INVENTORIES (Bloomberg)
“The U.S. is pumping oil faster than at any time since 1972, and storage tanks are getting filled to the brim. U.S. oil production rose for the fourth consecutive week, to a rate of 9.3 million barrels a day, even as oil-drilling rigs are being idled at an unprecedented rate. U.S. inventories also rose, for the eighth consecutive week, jumping 2.4 percent to 444 million barrels, the U.S. Energy Information Administration reported today.” Story at…
http://www.bloomberg.com/news/articles/2015-03-04/the-u-s-is-pumping-even-more-oil-and-storage-tanks-are-getting-filled-to-the-brim
If inventories are rapidly rising, the price of oil is going lower before it goes higher, at least so it would seem. The picture is not so clear cut. Traders bid oil prices higher Wednesday, because the rate of inventory build is not as fast as it was earlier.
ADP EMPLOYMENT (Reuters)
“U.S. private employers added fewer jobs than expected last month, with the gains declining as well from January's revised level as growth slowed in some sectors, a payrolls processor report showed on Wednesday.The ADP National Employment Report, jointly developed with Moody's Analytics, showed a gain of 212,000 private-sector jobs.” Story at…
http://www.reuters.com/article/2015/03/04/us-usa-economy-employment-adp-idUSKBN0M01F320150304
FED BEIGE BOOK – EXPANDING ECONOMY (CNBC)
“Amid a harsh winter and a mixed bag of data, most Federal Reserve districts reported a expanding economy and a prevailing sense of optimism. Jobs gained across a variety of sectors, though wage pressures were muted, according to the March summary of economic forecasts the Fed compiled in its Beige Book of indicators.” Story at…
http://www.cnbc.com/id/102477040
MARKET REPORT
- Wednesday, the S&P 500 was down about 0.4% to 2099 (rounded).
-VIX was up about 3% to 14.23.
-The yield on the 10-year Treasury Note remained 2.12%.
PULLBACK
The S&P 500 is 1.8% above the 50-dma and 5.1% above the 200-dMA. It is not likely that the index will fall more than either of those levels of support. It appears that a pullback is underway or will start soon.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) fell to 52% 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 +61. (It was +89 Tuesday). The 10-day moving average of change in the spread remained minus-6. In other words, over the last 10-days, on average, the spread has DECLINED by 6-each day.
Internals remained neutral on the market, but are continuing to deteriorate.
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 BUY. The PRICE and VIX indicators are positive. VIX is not rising fast enough to set off alarm bells. UP-moves have been much larger than down recently and that has pushed PRICE to a positive indication. VOLUME and SENTIMENT indicators are neutral, although sentiment remains extremely high.
The BUY means that conditions today were good, but it's not necessarily a good time to buy. The important BUY call was on 29 October, about 1% above the October bottom.
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) and an EAFE based fund to get some international exposure because they are the only small-cap and international choices in my retirement account. (The DWCPF includes all stocks EXCEPT the S&P 500. The DWCPF is 1.9% ahead of the S&P 500 since 1 February.)
