“Oil futures rose to the highest level this year as U.S. crude stockpiles capped their longest stretch of weekly declines since August. Supplies decreased 6.81 million barrels through June 5, the biggest drop since July…”
http://www.bloomberg.com/news/articles/2015-06-09/oil-extends-gain-a-second-day-as-u-s-supplies-seen-shrinking
SEMICONDUCTORS FALLING?
The ISM Manufacturing report said that 14 out of 18 industries reported growth, with only textile mills and computer and electronic products reporting contractions.” The SPDR Semiconductor ETF is down about 2% since this information was published on 1 June. Intel is down almost 10%. It’s hard to say in Intel’s case whether the decline is due to its announced merger with Altera or the ISM report; but this is trader-think – react to all news. I am not a trader though, so I am still holding Intel.
MARKET REPORT
-Wednesday, the S&P 500 was up 1.2% to 2105 at the close.
-VIX fell about 9% to 13.22.
-The yield on the 10-year Treasury Note was up to 2.48%. (As a percentage move, that’s 2.5% higher on the day. That’s a pretty big move on a percentage basis.)
Since funds are leaving the bond trade causing interest rates to rise as bond selling continues, one wonders where that money will go. Gold, REITs, Dividend Stocks, all were up today, but none as high as the S&P 500. Perhaps the large cap stocks will be seen as the safe haven?
We got the expected turn-around on the S&P 500 today at the bottom of the trend line.
The reversal in the new/hi-new/low data was strong as well as a good bounce in up-volume today. Wednesday looks like a reversal day and I expect we head up from here, although given the big up-move today, expect some profit taking tomorrow. Tomorrow (Thursday) will probably be a down day.
The old high on the S&P 500 was 2131. If the index can break higher, 2200 seems doable; then it will be time for caution. I’m guessing late summer or fall may bring a correction. It’s only a guess though. There is nothing in my system that is suggesting a correction or crash then, so 2200 here we come. (Let’s be optimistic.)
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) remained 44% at the close Wednesday. (A number below 50% is usually BAD news for the markets. In a positive reversal, New-highs outpaced New-lows Wednesday. The spread (new-highs minus new-lows) was +43 (It was -100 Tuesday.) The 10-day moving average of change in the spread rose to +2. In other words, over the last 10-days, on average; the spread has increased by 2 each day. Internals switched to neutral on the markets, but only breadth kept it from a positive reading.
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
Tuesday, 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 3.6% ahead of the S&P 500. Since 1 March the Euro-Pacific ETF (EFA) (“I”-fund) is 2.2% ahead of the S&P 500.
THRIFT SAVINGS PLAN (TSP) MEMBERS
My current TSP Allocation: 50%-G; 10%-C; 20%-S; 20%-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.)
