“Greece’s creditors suggested for the first time that a deal to avert the country’s bankruptcy was in sight after an 11th-hour proposal submitted by Athens on Monday made a significant concession on pension cuts.” Story at…
http://www.marketwatch.com/story/greek-bailout-proposals-lift-hopes-of-deal-2015-06-22
DOW THEORISTS BEGONE! (Cass Freight Index)
“May shipment volume and payments have reached high points for 2015. Both indexes have been rising for the last four months after a dismal January due to bad weather and delays at West Coast ports…While 2015 opened with negative GDP growth, freight growth has been strong. Freight shipments are mirroring the rise in 2014, without the spring stumbles we have experienced in previous years. The overall economy is taking more time to ratchet back up from the dismal start.” Commentary from Cass Information Systems at…
http://www.cassinfo.com/Transportation-Expense-Management/Supply-Chain-Analysis/Cass-Freight-Index.aspx
My cmt: Once again, Dow Theory is wrong. Freight shipment volume and payments are not indicating a slowdown; weak transportation stocks (the basis for Dow Theory) are sending a false signal on the industrial health of the US economy. If someone says weak Trannies are signaling a downturn in the stock market, ignore them.
HINDENBURG OMEN (Amateur Investor.net)
“Another Hindenburg Omen (HO) occurred [last] week which is the first one since December of last year.” Commentary at…
http://www.amateur-investor.net/AII_Weekend_AnalysisJune_20_15.htm
My cmt: This was an interesting piece that discussed the Hindenburg Omen while correlating them to significant stock-market crashes. I currently track a modified Hindenburg Omen based on a 10-day, Exponential Moving Average and the McClellan oscillator. Currently the new-high new low data isn’t high enough to trigger my “Modified Hindenburg Omen”. My new-high/new-low signal in the system is based on Norman Fosback’s book, Stock Market Logic where he describes the Fosback High Low Logic Index. I ignore unchanged issues and use 3% as the trigger point. The Hindenburg Omen uses Fosback’s Logic Indicator, but not all use it as he described. I don’t think there was a Hindenburg Omen last week.
TON OF IVORY CRUSHED (AP)
“Over a ton of confiscated ivory tumbled off a conveyor belt into a rock crusher in Times Square on Friday in a symbolic display highlighting an illegal trade that activists say threatens the survival of African elephants.” Story at…
http://hosted.ap.org/dynamic/stories/U/US_ELEPHANT_POACHING_TIMES_SQUARE?SITE=VANOV&SECTION=HOME&TEMPLATE=DEFAULT#_ga=1.230764767.1957023670.1434769661
My cmt: This is simple right? Destroy the confiscated ivory; but there is an un-intended consequence. Reducing the supply increases the value and makes poaching more lucrative. Mish Shedlock discussed this years ago in his economics blog. Flooding the market with the confiscated ivory would hurt the poachers by driving down prices.
MARKET REPORT
-Monday, the S&P 500 was up about 0.6% to 2123 at the close.
-VIX fell about 9% to 12.74.
-The yield on the 10-year Treasury Note rose to 2.36%.
Short term the Markets look good due to the positive reading on Market Internals.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) rose to 52% at the close Friday. (A number above 50% is usually GOOD news for the markets.
New-highs outpaced New-lows Monday. The spread (new-highs minus new-lows) was +119 (It was +35 Friday.) The 10-day moving average of change in the spread remained +12. In other words, over the last 10-days, on average; the spread has INCREASED by 18 each day. Internals switched to 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
Monday, the NTSM long-term 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 4.3% ahead of the S&P 500. Since 1 March the Euro-Pacific ETF (EFA) (“I”-fund) is 2.5% 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.)
