“There were 5.38 million job openings in October, the Labor Department said Tuesday, down from 5.53 million in September…hiring picked up: there were 5.14 million hires in October, up from 5.08 million in September.” Story at…
http://www.marketwatch.com/story/job-openings-decline-to-538-million-while-quits-pick-up-2015-12-08
CHINA EXPORTS FALL (Bloomberg)
China’s exports fell for a fifth month while a slump in imports moderated, as policy makers seek to spur domestic spending amid tepid global demand. Overseas shipments dropped 6.8 percent in November in dollar terms from a year earlier..."
http://www.bloomberg.com/news/articles/2015-12-08/china-exports-fall-for-fifth-month-import-slump-continues
SMART MONEY OPTIONS INDICATOR OFF THE CHARTS BEARISH (Dana Lyons’ Tumbler)
The headline says it all. Commentary at…
http://jlfmi.tumblr.com/post/117100120270/smart-money-options-indicator-now-off-the
MARKET REPORT / ANALYSIS
-Tuesday, the S&P 500 fell about 0.7% to 2064 at the close.
-VIX rose about 11% to 17.6. (The Options Boys are waking up.)
-The yield on the 10-year Treasury rose to 2.24.
I track market internals versus the S&P 500. Market Internals are falling at a very fast rate and are now significantly down when compared to the decline of the S&P 500 Index. The S&P 500 usually follows the market internals so I expect the Index to track lower.
How far? I don’t know, but there are several possible support levels. The 50-dMA on the S&P 500 is now 2045, but since that is below the 200-dMA it may be irrelevant. A 50% down retracement would put the market at about 1990. From the S&P 500 chart it looks like an important level is around 1930-1980. All of those levels will be watched for a possible buy signal. A retest of the 25 Aug low is still possible.
The S&P 500 is now at its 200-dMA, but the slope of the 200-dMA remains DOWN as of Tuesday; that is signaling the trend is down, whether it will be long-term remains to be seen. We might get a bounce here.
I have 2 indicators that have been very reliable recently, one based on breadth (but not the overbought/oversold ratio) and one based on smart-money; both are still suggesting further downside ahead.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) fell to 44.1% Tuesday vs. 47.3% Monday. (A number below 50% is usually BAD news for the markets. On a longer term, the 150-day moving average of advancing stocks slipped to 49.1%. A value below 50% indicates a down trend.
The McClellan Oscillator (a Breadth measure) remained negative Tuesday.
New-lows outpaced New-highs Tuesday. The spread (new-highs minus new-lows) was minus-304. (It was -288 Monday.) The 10-day moving average of the change in spread was -27 Tuesday. In other words, over the last 10-days, on average; the spread has decreased by 27 each day.
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, the NTSM long term indicator was HOLD. The Price indicator is positive. Sentiment, VIX & Volume are neutral. I remain skeptical that this is a good time to get in. My prior blog posts explain the reasoning. The market needs to break out higher before I will be convinced.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATIONAll cash: G-Fund (Cash, risk-free yielding 2.1% over the last 12-months): 100%
I made a rather impulsive sell decision. For my reasons (or lack of reason) see “My Invested Stock Position” in my prior blog at...
http://navigatethestockmarket.blogspot.com/2015/11/factset-earnings-cass-freight-index.html
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. In fact, I don’t recommend it. 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.
