Jobless Claims … Stock Market Analysis

HAVE A MERRY CHRISTMAS AND BE SAFE!
 
JOBLESS CLAIMS (Reuters)
“The number of Americans filing for unemployment benefits fell more than expected last week, nearing a 42-year low as labor market conditions continued to tighten in a boost to the economy. Initial claims for state unemployment benefits dropped 5,000 to a seasonally adjusted 267,000 for the week ended Dec.19…” Story at…
http://www.reuters.com/article/us-usa-economy-idUSKBN0U711A20151224
 
MARKET REPORT / ANALYSIS        
-Thursday, the S&P 500 dipped about 0.2% to 2061 at the close.
-VIX rose about 1% to 15.74.
-The yield on the 10-year Treasury was 2.24.
 
“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 remained positive.  The Overbought-Oversold Index (Advance Decline Ratio) is close to signaling an oversold condition, but neither RSI nor the Smart Money Index is close yet. It looks like the index can go higher – how much remains to be seen.
 
MONEY TREND
My new “Money Trend” indicator tracks Up-$ vs. Down-$ vs the S&P and it remains bullish too.
 
The Index is poised to make a run at the 2100 level or about 2% higher.  Until the market internals show some sign of distress, I remain “in”. I am only willing to invest 50% in stocks since we are close to the all-time high of 2131. Keep risk low.
 
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 55.1% Thursday vs. 54.5% Wednesday.  (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 49.1%. A value below 50% indicates a down trend.
 
The McClellan Oscillator (a Breadth measure) remained positive Thursday and was higher.
 
New-highs outpaced New-lows Thursday. The spread (new-highs minus new-lows) was +35. (It was +30 Wednesday.)   The 10-day moving average of the change in spread was +17 Thursday.  In other words, over the last 10-days, on average; the spread has INCREASED by 17 each day. Market Internals remained positive Thursday.

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, Sentiment, Price, Volume & VIX indicators are neutral.

MY INVESTED STOCK POSITION:
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