Gross domestic product grew at a 4.1 percent annual rate instead of the 3.6 percent pace reported earlier this month, the Commerce Department said in its third estimate on Friday….That was the quickest pace since the fourth quarter of 2011 and beat economists' expectations for an unrevised 3.6 percent rate. The economy grew at a 2.5 percent pace in the April-June quarter…A large build-up of stocks still accounted for much of the increase in GDP growth in the July-September quarter. That has left economists anticipating a sharp slowdown in the pace of inventory accumulation, which would hurt fourth-quarter growth. .. Some economists say the inventory drag on GDP could be delayed until the first quarter of 2014, while others believe the third-quarter stock pile-up was probably planned.” Full story and video at CNBC at…
http://www.cnbc.com/id/101289006
This is the third estimate of GDP for the Third Quarter,
as BLS continues to refine the numbers as time goes by and more data is available.
INVESTING ADVICE (The Old Fool)
The best piece of investing advice: “Trade what you see
not what you think.” – TOF
I think the markets will correct in January, but what I
see is a continuation of the current uptrend.
BOND REPORT
Art Cashin, UBS Director of NYSE floor trading and CNBC
contributor, has been saying for weeks that 3% bond yield for the 10-year would
be trouble for the stock market.
Recently he said that if the yield got to 2.95% there would be “pressure
on stocks” and a yield of 3.0% would bring “more pressure on stocks”. CNBC Video at…http://video.cnbc.com/gallery/?play=1&video=3000229563
Friday, the 10-year bond closed at a yield of 2.89%. It was 2.81 at the beginning of December and
1.86 at the beginning of 2013.
MARKET REPORT
Friday, the S&P 500 was up 0.5% to 1818 (rounded) VIX was down 2.5% to 13.79.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing remained 52%
at the close Friday. (A number above 50%
for the 10-day average is generally good news for the market.)
New-highs outpaced new-lows Friday, leaving the spread
(new-hi minus new-low) at +242 (it was +69 Thursday). The 10-day moving average of change in the
spread was +20. In other words, over the last 10-days, on average, the spread
has increased by 20 each day.
Market internals improved again and remain positive on
the market.
Market Internals are a decent trend-following analysis of
current market action, but in 2013 (so far), if I had been buying the positive
ratings and selling negative ratings I would have under-performed a
buy-and-hold strategy.
NTSM
Sentiment was 79%-bulls at
the close Thursday and the 5-dMA of sentiment is 75%-bulls in the
Rydex/Guggenheim long/short funds I track.
These are incredibly high values and Thursday’s closing value was the highest
one-day reading I have seen in 2013. High sentiment is a negative indicator for
the stock market – but they haven’t stopped the market all year.
Volume was double normal
levels on the NYSE due to options expiration and rebalancing in the S&P
500.
The S&P 500 is 8%
above the 200-dMA and a value of 10% has led to small pullbacks in the
past. Other indicators are all neutral
of positive.
The most recent BUY signal for the NTSM system was 25
October. The “5-10-20 Timer” switched to
BUY from HOLD on 18 December.
MY INVESTED POSITION - INCREASED STOCK HOLDINGS
I am about 30% invested in stocks as of 20 December (S&P 500 -1540) because I upped my stock holdings by 10% today. I will income- average (a little each month) into the stocks to get my %-invested up to around 50% - that is my max in this higher risk environment. The markets remain risky, but waiting for a correction has been futile. Remaining at a low %-invested still leaves me protected, but recognizes that the markets may continue up.
