Jobless claims climbed by 15,000 to 297,000 in the period ended July 4, the highest since February…The data can be volatile this time of year because of the Fourth of July holiday and temporary shutdowns of auto plants to prepare for the production of new models.” Story at…
http://www.bloomberg.com/news/articles/2015-07-09/more-americans-than-forecast-filed-jobless-claims-last-week
MARKET REPORT/ANALYSIS
-Thursday, the S&P 500 was up about 0.2% to 2051 at the close.
-VIX was up about 2% to 19.97.
-The yield on the 10-year Treasury was up to 2.30%.
VIX was UP so the options boys aren’t agreeing with stock buyers Thursday. They remain cautious. There was late-day selling too, so even the stock traders aren’t buying this market hard yet.
Wednesday, the S&P 500 closed about 0.4% below the 200-dMA and made a lower low when compared to 29 June. Declining volume in a falling market can be a good sign of selling exhaustion, but using S&P 500 data, it appears to me that volume did not really decline when compared to the prior low. Bottom line, I still don’t think there was a buy signal Wednesday, even though there was some bounce today.
The 50-dma of advancing stocks remained 47% Thursday. (Below 50% is a bad for the stock markets.) In the last 10-days, 38% of the total volume on the NYSE has been up-volume. (That stat was 33% Wednesday.) Both of these need to be above 50% to indicate a healthy market.
The percentage of stocks above their 200-day moving average dropped to 39% Wednesday (data is a day late). This is still about 2-standard deviations below norm and is suggesting trouble. The S&P 500 closed about 0.2% below its 200-day moving average, so the big stocks are struggling some too.
CONCLUSION
Calling a bottom on small declines is mostly guess work. I think the Index has further to fall, but perhaps not too much. RSI was 36 Thursday. 30 is oversold; this suggests the S&P 500 Index could be close to its low. Perhaps the Index will retest the low soon.
The market is now news driven (although I am watching the technicals for a buy signal) so it could all depend on Greece. But Greece isn’t the only problem.
China won’t be able to prop up the Shanghai index in the long run. The Rockefellers and the banks pushed the DOW up in 1929 by massively buying stocks in an effort to halt the stock decline that led to the Great Depression. It only held off further declines for a while. We’ll have to wait and see how the markets react to China’s troubles as the story unfolds.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) climbed to 43% 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-79. (It was -160 Wednesday.)
The 10-day moving average of change in the spread rose to minus-11 Thursday. In other words, over the last 10-days, on average; the spread has DECREASED by 11 each day.
Internals switched to neutral on the markets, but only up volume was positive.
NTSM
Thursday, the NTSM long-term analysis is HOLD. The VIX indicator is negative. SENTIMENT, VOLUME, and PRICE indicators are neutral.
MY INVESTED STOCK POSITION
On 30 June, I cut my investments from 50% invested to 30% invested in stocks, all in an S&P 500 index due to my SELL signal the day before.
I am keeping 30% invested since it assures I will have gains if the market goes up. On the other hand, even in a worst case scenario I would only lose 15% in the unlikely event the market were to be cut in half.
THRIFT SAVINGS PLAN (TSP) MEMBERS
My TSP Allocation: 70%-G; 30%-C.
