“The Conference Board Consumer Confidence Index®,
which had increased in September, declined in October. The Index now stands at
98.6 (1985=100), down from 103.5 in September….“Consumer confidence retreated in October,
after back-to-back monthly gains,” said Lynn Franco, Director of Economic
Indicators at The Conference Board. “Consumers’ assessment of current business
and employment conditions softened, while optimism regarding the short-term
outlook retreated somewhat.” Press release at…
END OF THE BOND BULL? (Real Investment Advice)
“…there is one other possibility that the majority
of analysts and economists ignore which I call the “Japan Syndrome.” Japan
is has been fighting many of the same issues [similar to the US] for the past
two decades. The “Japan Syndrome” suggests that while interest
rates are near lows it is more likely a reflection of the real levels of
economic growth, inflation, and wages. If that is true, then rates are
most likely “fairly valued” which implies that the U.S. could remain
trapped within the current trading range for years as the economy continues
to “muddle” along.” – Lance Roberts
Chart and commentary at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 dropped about 0.4% to 2143.
-VIX rose about 3% to 13.46 at the close.
-The yield on the 10-year Treasury remained 1.76%.
The “Calm-Before-the-Storm” indicator is still suggesting
a big drop is coming, but this indicator can be very early and it frequently
flashes a month or more in advance. On
the other extreme the signal has occurred as little as a few days in
advance. Then again, it isn’t always
accurate as is true of most indicators.
I think it will be accurate this time, but it may take a bit longer for
the set-up to take place. So far I have
not taken a VXX position. I might also note that by “big-drop” I am referring
to a big one-day drop that might or might not lead to further declines.
Short-term indicators are now mostly bullish, but still mixed
so I have not taken a Trading Position.
Long-term, I’m fully invested at 50% in stocks (a
conservative-retiree allocation) – I’m hold-my-nose bullish.
TRADING PORTFOLIO
TUESDAY MARKET INTERNALS (NYSE DATA)
-10-day moving average of the percentage of stocks
advancing (NYSE): 51.5%. (48.9% yesterday.) A number above 50% is usually BULLISH
for the markets short-term.
-150-day moving average of advancing stocks: 53.4%. (A
value above 50% indicates a long-term, up-trend.)
-McClellan Oscillator: declined from +5 to -7 (percentage
calculation method), essentially unchanged.
-New-highs minus new-lows: 40 (It was 90 Monday.)
-10-day moving average of the change in spread: +5. In
other words, over the last 10-days, on average, the spread has increased by 5
each day.
Market Internals improved
to Positive 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).
LONG TERM INDICATOR
Tuesday the Price, VIX, Volume, & Sentiment
indicators were neutral. Overall the long-term indicator remained HOLD.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I increased stock allocation to 50% stocks in
the S&P 500 Index fund (C-Fund) Friday, 23 Sep in my long-term accounts
based on a number of indicators. Remainder is 50% G-Fund. This is a
conservative retiree allocation.
