“The number of Americans filing for first-time
unemployment benefits fell last week, an indication the labor market is
improving. Initial jobless claims…decreased by 5,000 to a seasonally adjusted 271,000 in the
week ended Nov. 14…” Story at…
PHILADELPHIA FED (Investor’s Business Daily)
“The Philadelphia Federal Reserve's manufacturing index
for the mid-Atlantic district rose to 1.9 in November from -4.5 in October and
-6 in September.: Story at…
My cmt: Finally, we have some positive news about the
manufacturing sector.
LEADING ECONOMIC INDICATORS (Advisor Perspectives)
From the Conference Board press release: “The Conference
Board Leading Economic Index® (LEI) for the U.S. increased 0.6 percent in
October to 124.1 (2010 = 100), following a 0.1 percent decline in September,
and a 0.1 percent decline in August…Despite lackluster third quarter growth,
the economic outlook now appears to be improving. While the U.S. LEI’s
six-month growth rate has moderated, the U.S. economy remains on track for
continued expansion heading into 2016.” See Doug Short’s commentary from
Advisor Perspectives at…http://www.advisorperspectives.com/dshort/updates/Conference-Board-Leading-Economic-Index.php
MARKET REPORT / ANALYSIS
-Thursday, the S&P 500 was down about 0.1% to 2081 at
the close.
-VIX was fell about 1% to 16.99.
-The yield on the 10-year Treasury dipped to 2.25.
The S&P 500 Index is about 0.8% above the 200-dMA.
My guess is that the market moves down from here, perhaps
in a hurry. It may retest the August low of 1868. Other possible support levels
are: The 50-dMA on the S&P 500 is 2008. A 50% down retracement would put
the market at about 1990. The chart looks like an important level is around
1930-1940. All of those levels should be watched for a possible buy
signal.
While I am bearish in the long term, it is possible that
the markets could bounce up and make a run at new-highs or news (such as
improved earnings/revenues) will improve my outlook. I will have a better idea about that if there
is a retest of the 1868 level.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) rose to 45.4% Thursday vs. 45% Wednesday. (A number below 50% is usually BAD news for the
markets. On a longer term, the 150-day
moving average of advancing stocks slipped to 49.2%. A value below 50%
indicates a down trend.
The McClellan Oscillator (a Breadth measure) remained
negative Thursday.
New-lows outpaced New-highs Thursday. The spread (new-highs
minus new-lows) was minus-38. (It was -54 Wednesday.) The 10-day moving average of the change in
spread was minus-6 Thursday. In other
words, over the last 10-days, on average; the spread has decreased by 6 each
day. The internals remained neutral on
the markets because up-volume is now increasing on a smoothed 10-day basis.
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
Thursday, the NTSM long term indicator was BUY. The Price
& VIX indicators are positive.
Sentiment and Volume indicators are neutral. I remain skeptical that this
is a good time to get in. My prior blog
posts explain the reasoning. My indicators in the NTSM system often are bullish
at a top since they are trend followers.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
All cash: G-Fund (Cash, risk-free yielding 2.1% over the
last 12-months): 100%
I made a rather impulsive decision. For my reasons (or
lack of reason) see “My Invested Stock Position” in my prior blog at...
There have been enough major top indicators recently to
warrant more caution than usual.
One needn’t be “all-out” to be well protected if there is
a bear market. For example: With 30% invested in the stock market, one would
only lose 15% of the portfolio if the market were to be cut in half; one would
have plenty to invest at the bottom and 30% in stocks hedges the bet if the
markets go up.
