Jobless Claims…Producer Price Index (PPI)

JOBLESS CLAIMS NEAR HISTORIC LOWS (WSJ)
“The number of Americans applying for first-time unemployment benefits dipped last week, a sign of broad health in the labor market. Initial jobless claims, a proxy for layoffs across the U.S. economy, decreased by 1,000 to a seasonally adjusted 264,000 in the week ended May 9…” Story at…
http://www.wsj.com/articles/u-s-jobless-claims-fall-to-264-000-1431606839
 
PRODUCER PRICE INDEX (USA Today)
“A sharp drop in the cost of gasoline and food pushed down overall U.S. producer prices in April. The Labor Department said Thursday that its producer price index fell 0.4 percent last month after rising 0.2 percent in March.” Story at…
http://www.usatoday.com/story/money/business/2015/05/14/april-producer-price-index-wholesale-inflation/27292963/
 
MARKET REPORT
-Thursday, the S&P 500 was up about 1.1% to 2021 (a new high) at the close.
-VIX was down about 7% to 12.74.
-The yield on the 10-year Treasury Note dropped to 2.24%. 
 
Indications are much more positive today, but there could be some profit taking tomorrow.  The S&P 500 still needs to move up a couple of percent to convince me that the long stall is over. Stocks haven’t risen very far since December.
                                                                          
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) jumped to 52% 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 +75. (It was +19 Wednesday.)  The 10-day moving average of change in the spread rose to +9.  In other words, over the last 10-days, on average; the spread has increased by 9 each day.
Internals turned positive 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 is now 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% ahead of the S&P 500. Since 1 March the Euro-Pacific ETF (EFA) (“I”-fund) 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 exceptional for risk-free money.)