“Applications for U.S. jobless benefits declined last week to the lowest level in 15 years, showing employers view a first-quarter slowdown in the economy is probably temporary. First-time filings for unemployment insurance fell by 34,000 to 262,000 in the week ended April 25, the lowest since April 15, 2000…” Story at…
http://www.bloomberg.com/news/articles/2015-04-30/jobless-claims-in-u-s-decrease-to-lowest-level-in-15-years
PERSONAL SPENDING (WSJ)
“U.S. consumer spending rose moderately in March, rebounding after a sluggish winter but suggesting Americans remain somewhat cautious despite months of cheaper gasoline and rising confidence. Personal spending, which measures purchases of everything from power tools to pedicures, increased a seasonally adjusted 0.4% from the prior month…” Story at…
http://www.wsj.com/articles/u-s-consumer-spending-rose-0-4-in-march-1430397215
CHICAGO PMI (MarketWatch)
The Chicago PMI jumped in April to a reading of 52.3 from 46.3 in March, to return above the 50-mark signaling expansion…"The bounce back in activity at the start of Q2 is consistent with a resumption of normal activity following the poor weather and port strikes earlier in the year…” said MNI Indicators Chief Economist Philip Uglow in a statement.” Story at…
http://www.marketwatch.com/story/chicago-pmi-back-in-positive-territory-for-april-2015-04-30
MARKET REPORT
-Thursday, the S&P 500 was down about 1% to 2086 at the close.
-VIX was up about 9% to 14.55.
-The yield on the 10-year Treasury Note rose to 2.04%.
CORRECTION? YES or NO.
CORRECTION, YES.
-Market Internals are negative.
-The variability of market moves has dropped into the danger zone. This is a very reliable indicator, but pullbacks can be small on this indication.
-XLI is underperforming the S&P 500 on every timeframe.
-The S&P 500 dropped 0.2% below the 50-dMA and that may worry investors.
-I have been saying that I suspect any correction is
weeks away; the numbers don’t look so good now.
CORRECTION, NO.
-Today was a statistically significant, down-day and that is usually followed by an up-day about 62% of the time. Since the S&P 500 is at the 50-dMA, this may be signaling the Index will move up from here.
-As of Thursday, there have been only 47 “up-days” in the last 100-days. This is usually a positive indication. If not, a correction from this “weak” level could be pretty bad.
-RSI dropped to 44 (14-day, SMA) RSI has not given an overbought indication since its oversold indication on 11 March.
-Thursday’s level is about where one would expect a bounce, based on the 50-day moving average of the S&P 500 and the general location of the lower trend line.
-Sentiment has been falling.
CORRECTION CONCLUSION
It looks like the markets may be in correction mode, but it’s not a done deal yet. Tomorrow may give some more clues. If the market continues down Friday, a correction is much more likely.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) fell to 47% at the close Thursday. (A number below 50% is usually BAD news for the markets.) New-lows outpaced New-highs Thursday. The spread (new-highs minus new-lows) was minus-14. (It was +21 Wednesday.) 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 declined by 7 each day.
Internals turned negative on the markets.
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. 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 2% ahead of the S&P 500. The S&P 500 Index has gained during earnings season since earnings were not as bad as feared. Since 1 March the Euro-Pacific ETF (EFA) (“I”-fund) is 3.1% 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 exceptional for risk-free money.)
