“A bearish story is being told by the relative performance of the market’s various sectors. That’s because the sectors with the best year-to-date returns are among those that typically lead the market prior to major tops. In addition, the sectors exhibiting the worst performances this year are those that typically lag…it’s rare for all these sectors’ performance rankings to fall so closely in line with the historical template for performance prior to major tops...” – Mark Hulbert. Commentary and analysis at…
http://www.marketwatch.com/story/leading-indicators-signal-a-market-top-2015-04-10?dist=beforebell
My cmt: It may well be that a major top is forming. The NYSE Composite index has been stalled for 10-months slightly above 11,000. The Nasdaq Composite has not yet broken above its 2000 all-time high. Short-term though, it looks like the markets will make it back at least to their prior highs around 2120 and probably to new highs.
TREASURY PRICES FALL AT WEAK AUCTION (Dow Jones Business News)
“U.S. Treasury prices stumbled Thursday after a government bond sale generated unenthusiastic demand, sending yields to their highest levels this month…Many bond managers say that while U.S. yields are too low in terms of how much the U.S. economy has improved, rock- bottom yields in Europe only increases the appeal of Treasurys and will limit how far U.S. rates can rise.” Story at…
Bottom line: Low yields don’t necessarily reflect a poor economic outlook for the US.
MARKET REPORT
- Friday, the S&P 500 was up about 0.5% to 2102 at the close.
-VIX was down about 4% to 12.58.
The VIX is reaching an area that may cause some concern that a pullback is in the offing. VIX below 12-13 has preceded recent pullbacks in the 3-5% range. (VIX fell below 10 back prior to the 2000 crash.) If the S&P 500 can get to about 2180 I may worry about the low VIX, but not now.
-The yield on the 10-year Treasury Note slipped slightly to 1.95%.
Sentiment (%-bulls in Rydex/Guggenheim long/short funds) continues to fall implying the markets can go higher.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) rose to 58% at the close Friday. (A number above 50% is usually GOOD news for the markets.) New-highs outpaced New-lows Friday. The spread (new-highs minus new-lows) was +113. (It was +105 Thursday.) The 10-day moving average of change in the spread was +12. In other words, over the last 10-days, on average; the spread has INCREASED by 12-each day.
Internals remained Positive on the markets Friday.
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
Friday, the NTSM analysis remained BUY primarily due to falling VIX; but the important BUY was after the October low. The PRICE and VIX indicators are positive. 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 1 February it is 4.1% 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 very good for risk-free money.)
