“All eyes are now on September for the country's first interest rate hike in nine years. And while rates are more than likely to lift off in the fall, that boost is far from a done deal. "Information received since the Federal Open Market Committee met in April suggests that economic activity has been expanding moderately after having changed little during the first quarter," the FOMC said in a statement Wednesday afternoon, noting that the domestic economy isn't ready for higher interest rates just yet.” Story at…
http://www.usnews.com/news/articles/2015/06/17/federal-reserves-stage-is-set-for-september-interest-rate-liftoff
Perhaps September, but even that is not a done deal. There was speculation that a rate hike is in the offing for September since Yellen has announced she will skip the Jackson Hole Economic Policy Symposium.
CRUDE INVENTORIES FALL AGAIN (Business Insider)
According to the Energy Information Administration, commercial crude inventories fell by 2.7 million barrels in the week ended June 12.” Story at…
http://www.businessinsider.com/crude-oil-inventories-june-17-2015-6
MARKET REPORT
- Wednesday, the S&P 500 was up about 0.2% to 2100 at the close.
-VIX fell about 2% to 14.5.
-The yield on the 10-year Treasury Note dipped to 2.31%.
The S&P 500 remains close to its trend line.
Statistical analysis of price-volume action shows a very calm market and that often leads to a break down, though this is not a crash signal. A couple percent down has been the norm in recent years.
Greece remains the wild card; technicals are weak, but technicals are in an area where they have reversed in the past. I’ll be looking for that reversal.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) remained 45% at the close Wednesday. (A number below 50% is usually BAD news for the markets.
In another bad sign for breadth, the 50-day, moving average of %-stocks rising remained 49%, i.e., half of all stocks on the NYSE have been falling over the last 10-weeks. The last time this happened was last September and October when the S&P 500 fell 7% (on closing numbers) and this stat reliably correlates to 5% and greater pullbacks. Currently though, the S&P 500 is sitting on its lower trend line so I am not expecting too much further downside...it could happen though.
In a positive reversal, New-highs outpaced New-lows Wednesday. The spread (new-highs minus new-lows) was +17 (It was -13 Tuesday.) The 10-day moving average of change in the spread remained minus-3. In other words, over the last 10-days, on average; the spread has decreased by 3 each day.
Internals are negative on the market, but they did
improve today.
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
Wednesday, 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, 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 3.9% ahead of the S&P 500. Since 1 March the Euro-Pacific ETF (EFA) (“I”-fund) is 1% 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.)
