“U.S. consumer prices rose for the third straight month in April, the latest sign inflation is stabilizing. The consumer-price index, which reflects what Americans pay for everything from breakfast cereal to medical care, rose a seasonally adjusted 0.1% in April from a month earlier…” Story at….
http://www.wsj.com/articles/consumer-prices-up-0-1-in-april-1432298027
YELLEN SPEECH (Washington Post Blogs)
“Yellen dismissed disappointing data from earlier this year…[and]… expressed confidence that the recovery remains intact -- even if it is not as robust as Fed officials themselves once thought…Yellen explicitly stated Friday that she expects the Fed will raise its benchmark interest rate this year, assuming the recovery proceeds as forecast. Most investors believe that means the central bank will make its first move in December…” Story at…
http://www.washingtonpost.com/blogs/wonkblog/wp/2015/05/22/fed-chair-affirms-plans-for-rate-hike-this-year/
MARKET REPORT
-Friday, the S&P 500 was down about 0.2% to 2126 at the close.
-VIX rose about 0.7% to 12.19.
-The yield on the 10-year Treasury Note rose to 2.21%.
Volume was very low today, less than 80% of the monthly average. Everyone left town for the Holiday, so I don’t put too much faith in today’s late day selling or the fact that a number of market internals declined. We’ll see what happens next week.
As of Friday, there have been only 46-up days in the last 5-months and that is a low number that suggests further upside in a Bull market. For the time being, we are still in a bull-market and I remain bullish for the next few months…BUT…data can be interpreted in many ways – this stat could be foreshadowing problems. If more than half of the trading-days over the last 5-months have been down, it could mean trouble ahead for the markets.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) dropped to 51% 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 +25. (It was +48 Thursday.) The 10-day moving average of change in the spread dropped to minus-2. In other words, over the last 10-days, on average; the spread has decreased by 2 each day.
Internals switched to neutral 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
Friday, the NTSM analysis remained HOLD. PRICE is positive. 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, mostly 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) remains ahead of the S&P 500. Since 1 February it is 2.5% ahead of the S&P 500. Since 1 March the Euro-Pacific ETF (EFA) (“I”-fund) is 3.3% 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.)
REMEMBER VETERANS AND ENJOY THE LONG WEEKEND!
