“In its third and final revision to the third quarter's economic growth figures, the bureau said U.S. GDP expanded at a 2 percent clip.” Story at…
http://www.usnews.com/news/articles/2015-12-22/gdp-exceeds-expectations-despite-inventory-drag
This was close to the expected number so no surprise here.
EXISTING HOME SALES (WSJ)
“Sales of existing homes plummeted nationwide in November to a level not seen in a year and a half, which an industry group blamed on delays to sales caused by changes in mortgage rules. Existing-home sales fell 10.5% in November from October to a seasonally adjusted annualized rate of 4.76 million…” Story at…
http://www.wsj.com/articles/u-s-existing-home-sales-plunge-in-november-1450796974
The new mortgage rules require an additional 3-days to process a mortgage so that accounts for the 10%-drop.
RECESSION WARNING? – NOT YET
The Industrial Select Sector SPDR ETF (XLI) has been underperforming the S&P 500 and last Friday looked downright scary. Monday & Tuesday the XLI improved vs. the S&P 500 and that is a bullish sign. The XLI is a cyclical index that sells off if investors are worried about recession, or just plain worried. Let’s hope the trend continues. There is optimism for the sector. See “Future Expectations of Manufacturing Activity Exhibit Optimism” at…
http://finance.yahoo.com/news/future-expectations-manufacturing-activity-exhibit-124628018.html
CHARTS ARE BEARISH (Marketwatch)
“Technically speaking, the U.S. markets’ backdrop has asserted a bearish-leaning tilt.” See the commentary and charts at…
http://www.marketwatch.com/story/charting-the-us-markets-bearish-technical-tilt-2015-12-22-121031440?dist=countdown
MARKET REPORT / ANALYSIS
-Tuesday, the S&P 500 rose about 0.9% to 2039 at the close.
-VIX fell about 11% to 16.6.
-The yield on the 10-year Treasury rose to 2.24.
Market Internals continue to improve so I am short-term bullish. I’ll need to pay attention around 2090 since as the Index approaches the upper-trend line it may have trouble getting higher.
MONEY FLOW
My new “money Flow” indicator tracks up-$ vs. down-$ vs the S&P. It appears to be a reliable indicator for short term decisions. It remains bullish.
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 previously.)
The 10-day moving average of the percentage of stocks advancing (NYSE) rose to 49.9% Tuesday vs. 44.3% Monday. (A number below 50% is usually BAD news for the markets. On a longer term, the 150-day moving average of advancing stocks improved to 48.8%. A value below 50% indicates a down trend.
The McClellan Oscillator (a Breadth measure) improved and is now positive Tuesday.
New-lows outpaced New-highs Tuesday. The spread (new-highs minus new-lows) was minus-33. (It was -150 Monday.) The 10-day moving average of the change in spread was +27 Friday. In other words, over the last 10-days, on average; the spread has INCREASED by 27 each day. Market Internals remain neutral Tuesday. Only the breadth indicator is preventing the Internals from a positive reading on the market and it is nearly positive.
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
Tuesday, Sentiment, Price, Volume & VIX indicators are neutral.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
Last Thursday 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).
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
