“Filings for U.S. unemployment benefits held below 300,000 for the 16th straight week, signaling a tighter labor market that will help propel growth in the second half of 2015. Jobless claims rose by 3,000 to 271,000 in the week ended June 20…” Story at…
http://www.bloomberg.com/news/articles/2015-06-25/jobless-claims-in-u-s-hold-below-300-000-for-16th-week
CONSUMER SPENDING (WSJ)
“Americans boosted spending in May at the fastest rate in almost six years, the latest sign the economy is rebounding from a brutal winter. Personal spending, which measures what consumers spend on everything from cars to medical care, jumped a seasonally adjusted 0.9% from a month earlier…” Story at…
http://www.wsj.com/articles/u-s-consumer-spending-soared-in-may-1435235495
MARKET REPORT
-Thursday, the S&P 500 was down about 0.3% to 2102 at the close, slightly below the 50-day moving average.
-VIX rose about 6% to 14.01.
-The yield on the 10-year Treasury Note rose to 2.39%.
Market Internals deteriorated further and are now negative on the markets.
The 50-day value of stocks advancing is only 48.2%. Simply, that means that less than half of the stocks on the NYSE have been going up over the last 50-days. That is not a good sign. It hasn’t done that since last October’s 7% mini-correction.
Statistical analysis shows that the S&P 500 is very calm with small moves in price-volume. That often leads to a retreat in the Index, though not necessarily a large one.
Relative strength Index (RSI) (14-day, SMA) is in neutral territory so no real news there. It is troubling that RSI is 53 (neutral) while the Index has retreated back to its lower trend line. This suggests that the Index could fall a ways before RSI would signal an oversold reversal if it does in fact retreat.
This market has me worried for the short term. I didn’t like today’s reversal in market Internals and especially that new-lows exceeded new-highs. I sold trading positions in IWM (Russell 2000) and UWM (leveraged Russell 2000), for a profit of a bit better than 2%.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) dropped to 48% at the close Thursday. (A number below 50% is usually BAD news for the markets.
New-lows outpaced New-highs Thursday. The spread (new-highs minus new-lows) was minus-32 (It was +28 Wednesday.) The 10-day moving average of change in the spread fell to minus-5. In other words, over the last 10-days, on average; the spread has DECREASED by 5 each day. Internals switched to negative 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.
Thursday, 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 in the long-term
portfolio, 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 4.2% ahead of the S&P 500. Since 1 March the Euro-Pacific ETF (EFA) (“I”-fund) is 1.1% 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.)
