“New applications for U.S. unemployment benefits jumped by 13,000 to 282,000 in the seven days ended Dec. 5, the highest level in five months.” Story at…
http://www.marketwatch.com/story/us-jobless-claims-jump-13000-to-282000-highest-level-in-five-months-2015-12-10?dist=lcountdown
For a detailed discussion of claims see Doug Short’s commentary at…
http://www.advisorperspectives.com/dshort/updates/Weekly-Unemployment-Claims
SAN BERNARDINO HAPPENED BECAUSE OF REPUBLICANS (Dailey Caller)
http://dailycaller.com/2015/12/05/liberals-stick-to-their-guns-san-bernardino-happened-because-republicans-wont-stop-terrorists-from-buying-guns/
I continue to be surprised by this type of comment. The Democrats controlled the House, Senate and Presidency when Obama was elected, yet they chose not to enact new gun restrictions. (The Federal Assault Weapons Ban passed under Bill Clinton expired in 2004, 4-years before Obama was elected.) I conclude that the Democrats don’t REALLY want gun control legislation now; they just want to blame the Republicans. It’s about gamesmanship, not governance. (PS - The Republicans are no better.)
“Reader, suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself.” – Mark Twain
SANTA RALLY REVISITED?
In December of 2014 the S&P 500 gained 0.3%, only a gain of 3.5% annualized. The S&P 500 was down 1.1% from Christmas Eve thru the end of the year. The 2015 Santa rally may not live up to expectations either.
MARKET REPORT / ANALYSIS
-Thursday, the S&P 500 rose about 0.2% to 2052 at the close.
-VIX fell about 1.4% to 19.34.
-The yield on the 10-year Treasury rose to 2.24.
The Advance/Decline ratio is still signaling overbought; that’s 2-days in a row. RSI is not yet oversold nor is the Smart Money Index. We could see more bounce, but the trend remains down.
The S&P 500 is now 0.2% below its 200-dMA and the slope of the 200-dMA remains DOWN as of Thursday so as noted, the trend is down; whether it will be long-term remains to be seen. The S&P 500 remains 0.1% below the 50-dMA; that’s 2-days below the 50-dMA. In theory that provides more confirmation of a downtrend.
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. Those levels will be watched for a possible buy signal. A retest of
the 25 Aug low is still possible.
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 slowing their downward movement, but they are still suggesting further downside ahead.
MARKET INTERNALS (NYSE DATA)
(I am getting data from a new site. Some of their numbers are subject to minor revision later today so the previous day’s numbers may be slightly different than reported today.)
The 10-day moving average of the percentage of stocks advancing (NYSE) fell to 41.0% Thursday vs. 42.2% 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 48.8%. A value below 50% indicates a down trend.
The McClellan Oscillator (a Breadth measure) remained negative Thursday but it did improve slightly.
New-lows outpaced New-highs Thursday. The spread (new-highs minus new-lows) was minus-130. (It was -141 Wednesday.) The 10-day moving average of the change in spread was -18 Thursday. In other words, over the last 10-days, on average; the spread has decreased by 18 each day. Market Internals remain negative on the market.
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 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.
This indicator was "sell "previously and that explains my
invested position.
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 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.
