“According to Fundstrat's research, the median gain following a flat year is 11 percent. However, he [Tom Lee] cautioned that the double-digit change could be down. The odds of a 10 percent or greater annual move in either direction following a flat year are 5 to 1, he said.” Story at…
http://www.cnbc.com/2015/12/23/tom-lee-5-to-1-odds-of-double-digit-stock-move-in-2016.html
CORRECTION COMING (CNBC)
"Our conviction lies that if you do get some seasonal year-end strength here, you want to sell into it," Oppenheimer's Ari Wald said on CNBC's "Futures Now" on Tuesday. "For the S&P 500 we are expecting a correction in the first quarter — that's where our conviction lies." Story at…
http://www.cnbc.com/2015/12/23/correction-coming-in-2016-heres-why.html
MARKET REPORT / ANALYSIS
-Monday, the S&P 500 dipped about 0.22% to 2057 at the close.
-VIX rose about 7% to 16.91.
-The yield on the 10-year Treasury slipped to 2.23.
“As an investor, you should remember that making money in the market is only one-half of the job. Keeping it is the other.” – Lance Roberts
Market Internals switched to neutral. This isn’t a surprise because the low overall volume pushes down up-volume even on a positive day. With negative days, the effect is even more pronounced on my indicator. Still, it suggests a slightly less bullish market position.
The Overbought-Oversold Index (Advance-Decline Ratio) is OVERBOUGHT. This is negative for the bulls.
My new “Money Trend” indicator tracks Up-$ vs. Down-$ vs the S&P and it remains bullish, but is slowing and could turn-down soon.
Until the market internals show more signs of distress, I remain “in”, but I am only willing to invest 50% in stocks since we are close to the all-time high of 2131. Keep risk low. If I get a short term sell signal, I will drop back to 30% invested with long-term money. That could happen Tuesday so I will post in the morning if I get a sell signal.
MARKET INTERNALS (NYSE DATA)
(I am getting data from various sites. Some of the numbers are subject to minor revision so the previous day’s numbers may be slightly different than reported yesterday.)
The 10-day moving average of the percentage of stocks advancing (NYSE) rose to 57.7% Monday vs. 55.1% Thursday. (A number above 50% is usually GOOD news for the markets. On a longer term, the 150-day moving average of advancing stocks improved to 49.2%. A value below 50% indicates a down trend.
The McClellan Oscillator (a Breadth measure) was positive, but it declined.
New-highs outpaced New-lows. The spread (new-highs minus new-lows) was +26. (It was +35 Thursday.) The 10-day moving average of the change in spread was +39 Monday. In other words, over the last 10-days, on average; the spread has INCREASED by 39 each day. Market Internals switched to neutral Monday.
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
Monday, Sentiment, Price, Volume & VIX indicators are neutral.
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
On 17 Dec I increased my invested position in my retirement account to 50% invested in stocks thru an S&P 500 Index fund (“C”-fund in the TSP). 50% is fully invested for me now; this is not the time for heroics, or accepting too much risk. I may not maintain a bullish stance for long; I’ll just see what the indicators have to say and I will move on the short term indicators. I am not bullish in the long-term.
See “Why the Bull Market May be Dead” in my 14 December blog at…
http://navigatethestockmarket.blogspot.com/2015/12/stocks-are-topping-time-to-sell-hussman.html
