Jobless Claims Down…Factory Orders Rise…Retirees Should Consider 30% Invested in Stocks

JOBLESS CLAIMS AT 283K, BETTER THAN EXPECTED (Advisor perspectives)
“In the week ending March 21, the advance figure for seasonally adjusted initial claims was 282,000, a decrease of 9,000 from the previous week's unrevised level of 291,000. The 4-week moving average was 297,000, a decrease of 7,750 from the previous week's unrevised average of 304,750.” – Dept of Labor.  Analysis and charts at…
http://www.advisorperspectives.com/dshort/updates/Weekly-Unemployment-Claims.php
 
FACTORY ORDERS RISE (Fox Business)
“Orders to U.S. factories rose in February, breaking a six-month losing streak. The Commerce Department says factory orders rose 0.2 percent in February, which was the first increase since July. But the good news for February is tempered by a revision in the January figure: orders fell 0.7 percent, worse than the 0.2 percent drop the government originally reported.” Story at…
http://www.foxbusiness.com/economy-policy/2015/04/02/us-factory-orders-rose-02-percent-in-february-after-6-months-declines/
 
THE CENTER OF GRAVITY FOR RETIREES - 30% INVESTED IN STOCKS (Seeking Alpha)
“Retirees and those almost retired shouldn't care what their highest level of risk tolerance is because they shouldn't be investing anywhere near it. There is no economic reason for a person to take more investment risk than necessary once they've accumulated enough money for retirement…the center of gravity for those who have accumulated enough for retirement…[should] be 30% stocks and 70% bonds. This is a conservative mix that has enough equity to growth with inflation and enough fixed income to keep portfolio volatility at bay.”
http://seekingalpha.com/article/3036636-the-center-of-gravity-for-retirees?ifp=0
I thought my 50%-50% Stock-Bond portfolio was conservative! The basic premise is correct – if you are retired, why gamble? If you can’t sleep at night, invest less in stocks.
 
MARKET REPORT
-Thursday, the S&P 500 was up about 0.4% to 2067 at the close. 
-VIX was down about 4% to 14.54 at 4PM. 
-The yield on the 10-year Treasury Note rose to 1.91%.
 
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) rose to 54% at the close Thursday.  (A number above 50% is usually GOOD news for the markets.) New-highs outpaced New-lows Thursday. The spread (new-highs minus new-lows) was +100. (It was +38 Wednesday.)  The 10-day moving average of change in the spread was +2.  In other words, over the last 10-days, on average; the spread has DECREASED by 2-each day.
 
Internals remained neutral; on the market Thursday, but internals were almost 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
Thursday, the NTSM analysis switched to BUY. The PRICE and VIX indicators are positive. VOLUME and SENTIMENT indicators are neutral, although (as always) sentiment remains extremely high. This indicates markets are generally favorable, but the important BUY signal was shortly after the October low.

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.  I am still holding my trade on the 2xRussell 2000 (UWM) from the bottom call on 26 March.
 
The Dow Jones US Completion Index (all stocks except the S&P 500) continues to outperform the S&P 500.  Since February it is 4.8% 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, however, the “G”-fund did return 2.2% over the last 12-months and that is very good for risk-free money.)