The final reading of the University of Michigan's consumer sentiment index rose to 96.1 in June. The reading is a five-month high.” Story at…
http://www.businessinsider.com/university-of-michigan-consumer-sentiment-index-june-2015-6
HUSSMAN (Hussman Funds)
“The financial markets are establishing an extreme that we expect investors will remember for the remainder of history, joining other memorable peers that include 1906, 1929, 1937, 1966, 1972, 2000 and 2007. The failure to recognize this moment as historic is largely because investors have been urged to believe things that aren’t true, have never been true, and can be demonstrated to be untrue across a century of history.” – John Hussman, PhD. Weekly Market Commentary from Hussman Funds at…
http://www.hussmanfunds.com/wmc/wmc150622.htm
My cmt: I don’t know if John Hussman is right yet; but he will be right, sooner or later. Based on past history, I suspect sooner. Still, I remain fully invested, but I have eliminated trading positions in the last 2-days.
MARKET REPORT
-Friday, the S&P 500 was down a point to 2101 at the close, slightly below the 50-day moving average.
-VIX rose about 0.1% to 14.02, nearly unchanged.
-The yield on the 10-year Treasury Note rose to 2.48%.
Market Internals remain negative on the markets.
The 50-day value of stocks advancing remained 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.
There was big volume Friday, nearly twice normal volume on the NYSE and 50% above normal for the S&P 500. Some would suggest this is “distribution” the transfer of stocks to late comers by the Pros with little change in price; others say that a high volume day without much change in price validates the current price and is bullish. My guess: perhaps traders headed out to the Hamptons for vacation and simply didn’t want to hold stocks next week. I don’t think the high volume, by itself, means much.
8% of today’s volume on the NYSE was on issues unchanged in price. (I think that’s correct. I am using an unfamiliar site for this data today.) This indicates a level of confusion by investors and sometimes precedes a decline. If it had been higher, say 9 or 10%, I‘d be more worried.
I sold the rest of my trading positions Friday. I had held the QQQ’s since March and sold for a miniscule 0.1% loss. Again, the market internals looked dreadful with new-lows drastically outpacing new highs. They had just turned up last week and this reversal to the downside has me concerned. There is no point in holding trading positions when one is not sure of market direction. Short-term, I think it will go lower, but internals can always reverse so no point in getting too worked up.
SOMETIMES CAUTION IS GOOD
“..the job of a portfolio manager is to participate in the markets with a predilection toward capital preservation. It is the destruction of capital during market declines that have the greatest impact on long-term portfolio performance.” – Lance Roberts
I remain in long-term positions.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) rose to 49% at the close Friday. (A number below 50% is usually BAD news for the markets.
New-lows outpaced New-highs Friday. The spread (new-highs minus new-lows) was minus-113 (It was -32 Thursday.) The 10-day moving average of change in the spread fell to minus-6. In other words, over the last 10-days, on average; the spread has DECREASED by 6 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.
NTSM
Friday, 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 retiree. 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.)
