Q1: down 2.9%
Q2: down 3.4%
Q3 (est): down 3.4%
Q4 (est) down 1.9%
Source: Factset
“…no one should be fooled into thinking that a strong dollar is the primary source of our revenue worries. We are facing lower demand due to slow—and in some cases declining—global growth.” – Bob Pisani. Commentary at…
http://www.cnbc.com/2015/10/22/heres-why-october-has-been-a-surprisingly-strong-month-for-stocks.html
PROFIT RECESSION (Street Talk Alive)
“Eric Parnell noted in his missive on recessions and bear markets…
"In the heavily policy managed markets over the last three decades, focusing on an 'earnings recession' instead of an 'economic recession; has demonstrated itself to be a potentially more effective predictive mechanism of a looming stock market decline.”
http://streettalklive.com/index.php/blog.html?id=2950
ECB - MORE QE (Global Economic Analysis)
“Quantitative easing in the eurozone to the tune of €1.1 trillion has not raised consumer price inflation as the ECB had expected. But neither bureaucrats nor central planners ever evaluate the effectiveness of their programs. Rather, when something does not work, they do more of it, until it does work, with no regard for the economic bubbles or other negative consequences…Nonetheless, central banks are not only bound and determined to achieve inflation, but with methods that failed for decades in Japan and more recently in both Europe and the US.” Commentary at…
http://globaleconomicanalysis.blogspot.com/
BEAR MARKET NOW (Financial Sense)
“I’ll give you my opinion, which is absolutely crystal clear: We are in a bear market now,” Griffiths said in an interview with Financial Sense Newshour…Griffith’s analysis suggests Dow utilities peaked a year ago, transports peaked last December, and the Dow now appears to have peaked as well. Also, among stocks on the New York Stock Exchange, over 80 percent were below their 200-day moving averages when the Dow Theory sell signal was triggered, he said…It would take a new all-time high on the major indices to override that." Commentary at...
http://www.financialsense.com/contributors/robin-griffiths/bear-market-shift-east
LONG PERIODS WITH NO CHANGE IN PRICE SUGGESTS SIGNIFICANT LOSS – THIS TIME IS DIFFERENT?
There was a gently falling market for much of the year in 2004; but after a long rising market, a stall is a significant concern.
Basic chart from…https://www.google.com/finance?q=INDEXSP%3A.INX&ei=qkwoU4ihAsX_6wGciQE
-Friday, the S&P 500 was UP about 1.1% to 2075 at the close.
-VIX was UP about 0.1% to 14.46. The Options Boys hedged a bit today.
-The yield on the 10-year Treasury rose to 2.08%.
Friday continued what looks like panic buying. So far I have chosen to sit out the rally and wait-and-see. This sort of prolonged advance is unusual, even after a correction. Market internals are still so-so. Up-volume and new-high/new-low data continues to suggest weakness. I am not a believer, but I will be forced to give in if this continues. The Index crossed above the 200-dMA. If that holds for a few days I’ll be back in. Otherwise I may fall into the perma-bear camp.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) remained to 53% Friday vs. 53% Thursday. (A number above 50% is usually GOOD news for the markets. On a longer term, the 50-day moving average of advancing stocks rose to 51.1%.
New-highs outpaced New-lows Friday. The spread (new-highs minus new-lows) was +54. (It was +60 Thursday.) The 10-day moving average of the change in spread was +1 Friday. In other words, over the last 10-days, on average; the spread has increased by 1 each day. The internals remain neutral on the markets.
NTSM
Friday, the NTSM long term indicator was BUY. Price, VIX and Volume indicators are positive. Sentiment is neutral. I am not following this guidance for the time being. The NTSM system is a trend following system and the following other indicators are suggesting we may see a turn down soon: falling up volume (on a 10-day basis) and weak Internals). If we don’t see a pullback soon, I will be buying stocks.
I will wait
before increasing stock holdings; I think there will be a better entry point.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
G-Fund (Cash, risk-free yielding 2.1% over the last 12-months): 70%
C-Fund (S&P 500): 15%
I-Fund (EFA): 15%
