“Consumer sentiment declined in September to the lowest level in a year as Americans anticipated a weaker economy in the face of a global slowdown and turbulent financial markets.” Story at…
http://www.bloomberg.com/news/articles/2015-09-11/consumer-sentiment-in-u-s-declines-to-lowest-level-in-a-year
My cmt: Sentiment surveys almost always mirror the stock market. Stock market down; consumer sentiment down. No surprise here.
PRODUCER PRICE INDEX (24/7 Wall St)
“August’s PPI for final demand was unchanged (0.0%) on a seasonally adjusted basis.” Story at…
http://247wallst.com/economy/2015/09/11/producer-prices-show-mixed-inflation-deflation-readings/
PREMISE: THIS IS A MAJOR DOWNTREND (McClellan Financial Publications)
“I am going with the premise that the stock market has indeed had the major top it was supposed to have in 2015, and that it is supposed to be in a downtrend, lasting until April 2016.” - Tom McClellan. Commentary at…
http://www.mcoscillator.com/learning_center/weekly_chart/vix_above_all_of_its_futures_contracts/
My cmt: This piece mainly focused on VIX interpretation, but the conclusion (above) was an important item. I am not convinced this is a major downtrend; it looks like a normal correction so far.
MARKET REPORT / ANALYSIS
-Friday, the S&P 500 was up about 0.5% to 1961 at the close.
-VIX fell about 5% to 23.20.
-The yield on the 10-year Treasury dipped to 2.18%.
Market Internals reversed today and switched to negative on the markets so the most likely direction is down from here. I am not very confident in that prediction though. 53% of stocks advanced today and that’s not a bad number. I also suspect traders may not want to be short into the Fed meeting next week. They will need to buy shares to cover the short positions so the markets may rise before the meeting next week.
Still, the most likely scenario is that the S&P 500 will retest the 1868 low before this correction ends - no guarantees though. The average length of corrections (top to bottom) since 1946 has been about 97-trading days. The average correction time since 2009 (corrections greater than 10%) has been 66-trading days. The current correction is 78 trading-days since the top.
The Death Cross remains in effect since the 50-dMA is below the 200-dMA for the S&P 500. This is a long term signal for many. In 2011, the Death cross occurred about 7% before the low. In 2010, the Death Cross first occurred at the low so it was not a good signal then.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) was 49.7% Friday vs. 53% Thursday. (A number below 50% is usually BAD news for the markets. On a longer term, the 50-day moving average of advancing stock was 47.7% and that’s remains a negative.
Again, New-lows outpaced New-highs Friday. The spread (new-highs minus new-lows) was minus-124. (It was -104 Thursday.) The 10-day moving average of change in the spread fell to minus-11 Friday. In other words, over the last 10-days, on average; the spread has DECREASED by 11 each day. The internals reversed to negative on the markets.
NTSM
Friday, the NTSM long term indicator was HOLD. The VIX indicator is negative. Volume, Sentiment and Price indicators are neutral.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATIONG-Fund (Cash, risk-free yielding 2.1% over the last 12-months): 70%
C-Fund (S&P 500): 15%
I-Fund (EFA): 15%
This is a conservative allocation. The number one priority now is return of capital; not return on capital.
When I do move back into stocks, I will initially invest a high percentage into stocks and phase back if the Index gets to prior highs.
