CHINA’S COLLAPSING ECONOMY (CNBC)
“China's exports fell 25.4 percent [year]-on-year in February, while imports declined 13.8 percent, clocking far bigger slides than expected by analysts.” Story at…
http://www.cnbc.com/2016/03/07/china-releases-trade-data-for-february-yuan-denominated-and-us-dollar-imports-and-exports.html
My cmt: Don’t worry; the Chinese economy is still expanding at 7% - Right.
CHINA GDP GROWING AT 7% (Reuters)
“China's economy grew 6.9 percent in 2015, the slowest pace in a quarter of a century, but still comfortably the fastest among major economies.” Story at…
http://www.reuters.com/article/us-china-parliament-economy-idUSKCN0W801D
My cmt: See above “Collapsing Economy” article. If imports and exports fell double digits, recession is probably already underway. It remains highly unlikely that the US will avoid further stock market correction while China and much of the rest of the world remains in turmoil.
ISM COMPOSITE – BAD NEWS FOR THE MARKETS (Real Investment Advice)
“While the markets keep hoping for further central bank
interventions to keep the game going, the real issue may be the limits of
manipulation have been reached. If that is the case, the “bullish case” may
have a problem.” – Lance Robertshttp://realinvestmentadvice.com/analyzing-earnings-as-of-q4-2015/
My cmt: The above chart only touches on one point. This commentary covered a lot of ground and was very interesting. It is bearish overall.
COMPARING STOCK MARKET CRASHES
Chart from Advisor Perspectives…http://www.advisorperspectives.com/dshort/updates/Four-Totally-Bad-Bears
My cmt: Today’s market (in Blue) looks a lot like prior crashes. The commentary from Doug Short at Advisor Perspectives is well worth the read. If the above chart doesn’t worry you, perhaps you should be a CNBC commentator.
BEAR MARKET RALLY (Financial Sense)
“I think that we are still seeing the rally out of January and February lows as a bear market rally... it's brought a lot of hope back into investors' hearts and that's usually a sign that it's time to turn around and go the other way…” – Tom McClellan
http://www.financialsense.com/contributors/tom-mcclellan/ides-march-market-timer
My cmt: Tom predicts an ugly March then rally and final low in October.
FED POLICIES INCREASE VOLATILITY (CNBC)
“…cheap money in today's low interest rate environment is not healthy, Richard Steinberg told CNBC's "Squawk Box" on Tuesday. "Traders in the short run have hijacked this market. You're seeing moves in crude or in equity prices, other commodities that could be the move of a year happening in a day or two," he said.” Story at…
http://www.cnbc.com/2016/03/08/low-rates-have-let-traders-hijack-the-market-cio.html
MARKET REPORT / ANALYSIS
-Tuesday, the S&P 500 was down about 1.1% to 1979 at the close.
-VIX was UP about 8% to 18.67.
-The yield on the 10-year Treasury dipped to 1.83%.
The 1% drop Tuesday was not big enough to trigger my “statistically-significant” warning that usually indicates a reversal, at least for a day. Still, 1% is often enough for others to play the opposite move so perhaps tomorrow will be up? I don’t know, but I think the markets continue generally down from here. My target remains around 1880 in the short run. After that, we’ll see.
The Overbought/Oversold Ratio remained “Overbought” Tuesday for the eleventh day in a row. RSI was “Overbought” last Thursday. Both are short-term bearish for the markets.
The S&P 500 dropped to 2.1% below the 200-dMA; the slope of the 200-dMA remains down. The Index remains in a down trend.
MONEY TREND & SHORT TERM TRADING
The short-term Money Trend indicator is still suggesting downside ahead.
I still am holding short positions in SH and QID. So far, these trades aren’t working.
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) is 63.3% Tuesday vs. is 64.1% Monday. (A number above 50% is usually GOOD news for the markets.)
On a longer term, the 150-day moving average of advancing stocks dipped to 50%. A value above 50% indicates an up-trend since slightly more stocks have advance over the last 150-days. The McClellan Oscillator (a Breadth measure) was significantly lower but remained positive.
New-highs again outpaced New-lows. The spread (new-highs minus new-lows) was +73 Tuesday. (It was +49 Monday.) The 10-day moving average of the change in spread fell to +6. In other words, over the last 10-days, on average; the spread has INCREASED by 6 each day. Market Internals remained positive on the markets.
NTSM
Tuesday, Price, Volume & VIX were positive. Sentiment was neutral. The long-term NTSM indicator is BUY. I have not followed the guidance yet. My guess is that the Index is topping out. We’ll see.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
On 30 Dec I reduced my invested position in my retirement
account to 30% invested in stocks thru an S&P 500 Index fund (“C”-fund in
the TSP) and on 15 Jan I reduced stock allocation to zero in long-term
accounts.
The S&P 500 peaked in Mid-May and has not been able to break higher in the past 9-months. That looks like a top to me. 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
