“Orders to U.S. factories fell in February for the third time in the past four months. Meanwhile, a key category that tracks business investment plans dropped by the largest amount in two months. Factory orders fell 1.7 percent in February…” Story at…
http://abcnews.go.com/Business/wireStory/us-factory-orders-contracted-february-38135555
4 THINGS TO WORRY ABOUT (Marketwatch)
No Growth…Low Oil…Strong Dollar (while it has weakened, the weakness won’t help Q1 earnings)…China. Story at…
http://www.marketwatch.com/story/four-things-you-better-worry-about-this-earnings-season-2016-04-01
MARGIN DEBT – SUGGESTS THE BEAR IS HERE (Jesse Felder’s Tumblr)
“…margin debt is only now beginning to come down from record highs, surpassing those seen at the 2000 and 2007 peak, this should be of concern to most equity investors.” Commentary at…
http://jessefelder.tumblr.com/post/142017729040/this-indicator-suggests-a-bear-market-is-now
MARKET REPORT / ANLYSIS
-Monday, the S&P 500 was down about 0.3% to 2066 at the close.
-VIX rose about 8% to 14.09.
-The yield on the 10-year Treasury dipped to 1.78%
MONEY TREND & SHORT TERM TRADING
The short-term Money Trend indicator is negative on the market and suggests further downside ahead. I continue to hold short positions mostly in SH and some in QID.
Below is the output from my “Breadth Index Top Indicator”. It tracks breadth vs. the S&P 500. The Indicator is plotted in RED; the S&P 500 is plotted in BLACK. When the indicator drops to 7% and reverses up, there is a high probability the top is in. It has been very reliable recently. I’d say the top is very near and perhaps was Friday. This may be a short-term top; or an indication of longer-term problems - I’ll be watching other indicators for clues.
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) fell dramatically to 50.4% Monday. It was 53.9% Friday. (A number above 50% is usually GOOD news for the markets.)
On a longer term, the 150-day moving average of advancing stocks slipped to 51.2%. A value above 50% generally indicates an up-trend, but the slope of the 200-dMA is still down, so the trend must still be considered down. The McClellan Oscillator (a Breadth measure) fell to a negative on the markets.
New-highs again outpaced New-lows. The spread (new-highs minus new-lows) was +136 Monday. (It was +172 Fri.) The 10-day moving average of the change in spread dipped to zero. In other words, over the last 10-days, on average; the spread has remained unchanged each day. Market Internals remained neutral on the markets.
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
Monday, Price & VIX were positive. Sentiment & Volume were neutral. The long-term NTSM indicator is BUY. I have not followed the guidance yet. My numbers suggest that the Index is topping out. I have been saying that for a while as the market has moved up; but there are some topping indicators (RSI & the Breadth Index Top Indicator) that suggest top real soon. We’ll see.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATIONOn 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 10-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
