ONLY 15% OF ADVISORS BEAT THE MARKET IN 2014 (MarketWatch) – NEITHER DID I
“In 2014, only 15.6% of the several hundred advisers monitored by the Hulbert Financial Digest did better than the broad stock market, as measured by the Wilshire 5000 Index. Five years ago, the proportion stood at 33.1%.”
http://www.marketwatch.com/story/beating-the-stock-market-has-become-even-harder-2015-01-07
My Cmt: NTSM analysis didn’t beat the market either. My personal account following my published moves was up 4.1% vs. an S&P 500 buy-and-hold return of 11.4%. Underperformance was primarily due to one sell call in February when the market fell 6% in 12-days and quickly reversed. Additionally, there were 3-other sell calls that were false alarms. I have revised the NTSM system indicators to de-sensitize sell signals and improve for the future. It was always my intention set the indicators to issue a sell in advance of a correction bigger than 10%. These revisions will not affect the ability of NTSM analysis to avoid big down-turns.
HOUSING NOT CALLING FOR RECESSION (McClellan Financial Publications – 3/26/15)
“Before each of the really ugly bear markets of the past 30 years, there has been an important signal from housing data well ahead of time. We do not have such a signal now, and so that portends more upside in the months ahead for stock prices.” Commentary at…
http://www.mcoscillator.com/learning_center/weekly_chart/no_bear_market_signal_yet_from_housing/
COMPARISON OF 4 BAD BEARS (Advisor Perspectives)
Chart and commentary at…MARKET REPORT
-Monday, the S&P 500 was UP about 0.9% to 2100 at the close.
-VIX was down about 4% to 13.30.
-The yield on the 10-year Treasury Note rose slightly to 1.88%.
STATISTICALLY SIGNIFICANT DAY
Monday’s large move up (exceeding my statistical measures for a statistically significant day) implies Tuesday is likely to be a down day about 62% of the time. That may not be true this time since the index is coming off a low and sometimes the index will just keep moving up.
BULLISH TRADE
I sold my position in the 2xNas100 ETF (QLD) for a 2% gain Monday (held for 1-day) since today's move in price and volume on the S&P 500 was statistically significant. I was tempted to hold it longer and was about 50-50 on the decision. If the market internals had looked better, I would have held the position. This was just a quick trade anyway, so in the end I stuck with my original plan. I still think the markets move up from here.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) remained 52% at the close Monday. (A number above 50% is usually GOOD news for the markets.) New-highs outpaced New-lows Monday. The spread (new-highs minus new-lows) was +42. (It was +8 Friday.) The 10-day moving average of change in the spread was minus-7. In other words, over the last 10-days, on average; the spread has DECREASED by 7-each day.
Internals remained neutral on the markets Monday and only Breadth is positive.
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
Monday, the NTSM analysis remained HOLD. PRICE, VOLUME, VIX 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 – the “S” fund in the TSP) continues to outperform the S&P 500. Since 1 February it is 3.9% ahead of the S&P 500. Since 1 March the Euro-Pacific ETF (EFA) (“I”-fund) is 1.6% ahead of the S&P 500.
