WEEKLY UPDATE – FEBRUARY 3, 2012
LATEST MARKET OUTLOOK
MARKET INDICES:
INDEX VALUE %CHANGE
|
S&P500=
|
1,345
|
+2.17
|
|
DJIA =
|
12,862
|
+1.59
|
|
Nasdaq=
|
2,906
|
+3.16
|
INDICATORS: THIS WEEK LAST WEEK STATUS
1. Treasury Yield Slope (%) = +3.05 +3.05 +
2. Fwd PE Ratio = 19.21 18.80 +
3. Put/Call Ratio (PCR) = 0.88 0.90 +
4. Real GDP (Annual % growth) = 1.8 1.8 +
5. Core CPI (Annual % growth) = 2.0 2.0 +
6. LTTS Signal (%) +5.07 +4.16 +
CURRENT ADVICE:
1. The Long Term Trend Signal (LTTS %) is positive. The long-term outlook for the market is higher.
2. The PI model is a BUY, and new money destined for the stock portion of your asset allocation should be Dollar Coat Averaged into equity funds.
DISCUSSION:
1. US markets jumped higher as the jobs numbers came in higher than expected and a Greek deal with bondholders appears imminent. The S&P500 rose +2.17% higher, closing at 1,345, while the DJIA rose +1.59%, closing at 12,862. The NASDAQ was higher by +3.16%, and closed at 2,906. The overall S&P500 is up +98.80% since the low of 676.53 on March 9, 2009. The market is -14.07% below the market peak of 1,565.15 set on October 9th 2007.
2. The PI model flashed a BUY signal as of October 28th. The LTTS signal continues to move higher, closing at +5.07. We bought equity holdings on 10/28, and recommend that new money destined for the equity portion of your portfolio be Dollar Cost Averaged into equity funds. All other indicators remain positive, and are forecasting a slow growing economy with no signs of a new recession.
3. The PCR moved mostly sideways and closed at 0.90, as investors pile into the market, now that is has staged an impressive rally YTD for 2012. After 5 weeks of gains, the market may rest or pull back a little before it rises from these levels. But it looks like it will try to breach the next higher overhead resistance level of 1,353.22 (depending on news from our friends in Europe of course) (see the details on our “Members Only” Latest Data Page). Join our FREE membership to receive special bulletins, advance warning of optimal entry points for the market, and analysis of financial news.
4. The “Current Recession Indicator” shows that we are currently not in a recession. Interest rate data follows:
ITEM DESCRIPTION LAST WEEK THIS WEEK
3 Month T-Bill 0.05% 0.08%
30 Year T -Bond 3.10% 3.13%
30 Year Fixed Mortgage 3.90% 3.90%
Slope of Yield Curve 3.05% 3.05%
Recession Probability-Future 0% 0%
5 out of 5 indicators are positive, the LTTS is positive, and the overall model is now in a BUY mode.
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WEEKLY UPDATE – JANUARY 27, 2012
LATEST MARKET OUTLOOK
MARKET INDICES:
INDEX VALUE %CHANGE
|
S&P500=
|
1,316
|
+0.07
|
|
DJIA =
|
12,660
|
-0.47
|
|
Nasdaq=
|
2,817
|
+1.07
|
INDICATORS: THIS WEEK LAST WEEK STATUS
1. Treasury Yield Slope (%) = +3.05 +3.05 +
2. Fwd PE Ratio = 18.80 18.79 +
3. Put/Call Ratio (PCR) = 0.88 0.87 +
4. Real GDP (Annual % growth) = 1.8 2.0 +
5. Core CPI (Annual % growth) = 2.0 2.0 +
6. LTTS Signal (%) +4.16 +3.60 +
CURRENT ADVICE:
1. The Long Term Trend Signal (LTTS %) is positive. The long-term outlook for the market is higher.
2. The PI model is a BUY, and new money destined for the stock portion of your asset allocation should be Dollar Coat Averaged into equity funds.
DISCUSSION:
1. US markets were mixed with the S&P500 managing to eke out a small gain as US GDP for Q4 came in lower than expected at 2.8%, and the Fed announced that it will maintain low interest rates through 2013. The S&P500 rose +0.70% higher, closing at 1,316, while the DJIA fell -0.40%, closing at 12,660. The NASDAQ was higher by +1.07%, and closed at 2,817. The overall S&P500 is up +94.52% since the low of 676.53 on March 9, 2009. The market is -15.92% below the market peak of 1,565.15 set on October 9th 2007.
2. The PI model flashed a BUY signal as of October 28th. The LTTS signal is now solidly in positive territory, closing at +4.16. We bought equity holdings on 10/28, and recommend that new money destined for the equity portion of your portfolio be Dollar Cost Averaged into equity funds. All our other indicators remain positive, and are indicating a slow growing economy with no signs of a recession.
3. The PCR moved sideways and closed at 0.88, as investors pile into the market, now that is has staged an impressive rally in January 2012. The next higher overhead resistance level is at 1,353.22. After 4 weeks of gains, the market is likely to pull back a little before it can rise from these levels (depending on news from our friends in Europe of course) (see the details on our “Members Only” Latest Data Page). Join our FREE membership to receive special bulletins, advance warning of optimal entry points for the market, and analysis of financial news.
4. The “Current Recession Indicator” shows that we are currently not in a recession. Interest rate data follows:
ITEM DESCRIPTION LAST WEEK THIS WEEK
3 Month T-Bill 0.03% 0.05%
30 Year T -Bond 2.91% 3.1%
30 Year Fixed Mortgage 3.90% 3.90%
Slope of Yield Curve 2.88% 3.05%
Recession Probability-Future 0% 0%
5 out of 5 indicators are positive, the LTTS is positive, and the overall model is now in a BUY mode.
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WEEKLY UPDATE – JANUARY 20, 2012
LATEST MARKET OUTLOOK
MARKET INDICES:
INDEX VALUE %CHANGE
|
S&P500=
|
1,315
|
+2.04
|
|
DJIA =
|
12,720
|
+2.40
|
|
Nasdaq=
|
2,787
|
+2.80
|
INDICATORS: THIS WEEK LAST WEEK STATUS
1. Treasury Yield Slope (%) = +3.05 +2.88 +
2. Fwd PE Ratio = 18.79 18.42 +
3. Put/Call Ratio (PCR) = 0.87 0.91 +
4. Real GDP (Annual % growth) = 2.0 2.0 +
5. Core CPI (Annual % growth) = 2.0 2.0 +
6. LTTS Signal (%) +3.60 +2.61 +
CURRENT ADVICE:
1. The Long Term Trend Signal (LTTS %) is positive. The long-term outlook for the market is higher.
2. The PI model is a BUY, and new money destined for the stock portion of your asset allocation should be Dollar Coat Averaged into equity funds.
DISCUSSION:
1. US markets continued their 3rd week of gains as companies (except those with heavy dependence in EU) reported strong earning and job hiring is slowly rising. The S&P500 rose +2.04% higher, closing at 1,315, while the DJIA was up +2.40%, closing at 12,720. The NASDAQ was higher by +2.80%, and closed at 2,787. The overall S&P500 is up +94.37% since the low of 676.53 on March 9, 2009. The market is -15.98% below the market peak of 1,565.15 set on October 9th 2007.
2. The PI model flashed a BUY signal as of October 28th. The LTTS signal is now solidly in positive territory, closing at +3.60. We bought equity holdings on 10/28, and recommend that new money destined for the equity portion of your portfolio be Dollar Cost Averaged into equity funds. All our other indicators remain positive, and are indicating a slow growing economy with no signs of a recession.
3. The PCR continues to fall to 0.87, as investors pile into the market, now that is has staged an impressive rally over the last two weeks. The next higher overhead resistance level is at 1,353.22. After 3 weeks of gains, the market is likely to pull back a little before it can rise from these levels (depending on news from our friends in Europe of course) (see the details on our “Members Only” Latest Data Page). Join our FREE membership to receive special bulletins, advance warning of optimal entry points for the market, and analysis of financial news.
4. The “Current Recession Indicator” shows that we are currently not in a recession. Interest rate data follows:
ITEM DESCRIPTION LAST WEEK THIS WEEK
3 Month T-Bill 0.03% 0.05%
30 Year T -Bond 2.91% 3.1%
30 Year Fixed Mortgage 3.90% 4.00%
Slope of Yield Curve 2.88% 3.05%
Recession Probability-Future 0% 0%
5 out of 5 indicators are positive, the LTTS is positive, and the overall model is now in a BUY mode.
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WEEKLY UPDATE – JANUARY 13, 2012
LATEST MARKET OUTLOOK
MARKET INDICES:
INDEX VALUE %CHANGE
|
S&P500=
|
1,289
|
+0.88
|
|
DJIA =
|
12,422
|
+0.50
|
|
Nasdaq=
|
2,711
|
+1.36
|
INDICATORS: THIS WEEK LAST WEEK STATUS
1. Treasury Yield Slope (%) = +2.88 +3.00 +
2. Fwd PE Ratio = 18.42 18.25 +
3. Put/Call Ratio (PCR) = 1.01 1.01 +
4. Real GDP (Annual % growth) = 2.0 2.0 +
5. Core CPI (Annual % growth) = 2.0 2.0 +
6. LTTS Signal (%) +2.61 +1.97 +
CURRENT ADVICE:
1. The Long Term Trend Signal (LTTS %) is positive. The long-term outlook for the market is to move higher.
2. The PI model is a BUY, and new money destined for the stock portion of your asset allocation should be Dollar Coat Averaged into equity funds.
DISCUSSION
1. US markets moved slightly higher in spite of S&P downgrades of the sovereign debts of the EU (except for Germany). Investor sentiment jumped higher as consumers again took on higher credit card debt as they increased spending during the Christmas season. The S&P500 rose +0.88% higher, closing at 1,289, while the DJIA was up +0.50%, closing at 12,422. The NASDAQ was higher by +1.36%, and closed at 2,711. The overall S&P500 is up +90.53% since the low of 676.53 on March 9, 2009. The market is -17.64% below the market peak of 1,565.15 set on October 9th 2007.
2. The PI model flashed a BUY signal as of October 28th. The LTTS signal was bouncing around its neutral level around year end, but has moved positive for the last 3 weeks, closing at +2.61. We bought equity holdings on 10/28, and recommend that new money destined for the equity portion of your portfolio be Dollar Cost Averaged into equity funds. All our other indicators remain positive, and are indicating a slow growing economy with no signs of a recession.
3. The PCR data is not available this weekend as the CBOE website is closed for scheduled maintenance till late Sunday night. The PCR is now back to more normal levels showing investors are not panicked as they were late last year. We crossed and closed above the overhead resistance level of 1,285.09, and conditions seem to indicate that the market could continue to rise from these levels (barring bad news from our friends in Europe of course)(see the details on our “Members Only” Latest Data Page). Join our FREE membership to receive special bulletins, advance warning of optimal entry points for the market, and analysis of financial news.
4. The “Current Recession Indicator” shows that we are currently not in a recession. Interest rate data follows:
ITEM DESCRIPTION LAST WEEK THIS WEEK
3 Month T-Bill 0.02% 0.03%
30 Year T -Bond 3.02% 2.91%
30 Year Fixed Mortgage 4.00% 3.90%
Slope of Yield Curve 3.00% 2.88%
Recession Probability-Future 0% 0%
5 out of 5 indicators are positive, the LTTS is positive, and the overall model is now in a HOLD mode.
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WEEKLY UPDATE – DECEMBER 23, 2011
LATEST MARKET OUTLOOK
MARKET INDICES:
INDEX VALUE %CHANGE
|
S&P500=
|
1,265
|
3.74
|
|
DJIA =
|
12,294
|
3.60
|
|
Nasdaq=
|
2,619
|
2.48
|
INDICATORS: THIS WEEK LAST WEEK STATUS
1. Treasury Yield Slope (%) = +3.04 +2.86 +
2. Fwd PE Ratio = 18.08 17.42 +
3. Put/Call Ratio (PCR) = 1.01 1.07 +
4. Real GDP (Annual % growth) = 2.0 2.0 +
5. Core CPI (Annual % growth) = 2.0 2.0 +
6. LTTS Signal (%) -0.30 +0.76 HOLD
CURRENT ADVICE:
1. The Long Term Trend Signal (LTTS %) turned negative this week. The long-term outlook for the market is not clear.
2. The PI model is a HOLD, and new money destined for the stock portion of your asset allocation should be placed in Money Market funds.
DISCUSSION:
1. US markets are staging a “Santa Claus” rally as unemployment claims dropped and durable goods orders rose showing that the US economy continues to grow. Favorable sovereign bond auctions took the EU woes out of the spotlight, albeit temporarily. The S&P500 rose +3.74% higher, closing at 1,265, while the DJIA was up +3.60%, closing at 12,294. The NASDAQ was higher by +2.40%, and closed at 2,619. The overall S&P500 is up +86.98% since the low of 676.53 on March 9, 2009. The market is -19.18% below the market peak of 1,565.15 set on October 9th 2007.
2. The PI model flashed a BUY signal as of October 28th. The LTTS signal has been bouncing around its neutral level, slightly negative to slightly positive, and switched to positive again at +0.76. We bought equity holdings on 10/28, and recommend that new money destined for the equity portion of your portfolio be held in Money Market funds. All our other indicators remain positive, and are indicating a slow growing economy with no signs of a recession.
3. The PCR moved slightly lower, closing at 1.01, and are now back to more normal levels showing investors are not panicked as they were a few weeks ago. The last bottom established on Oct 3 at 1,099.33 is still the low for this cycle. The lower resistance level for the market is now at 1,204.49. If it breaks through and closes below this level, then it could fall quite a bit further (see the details on our “Members Only” Latest Data Page). Join our FREE membership to receive special bulletins, advance warning of optimal entry points for the market, and analysis of financial news.
4. The “Current Recession Indicator” shows that we are currently not in a recession. Interest rate data follows:
ITEM DESCRIPTION LAST WEEK THIS WEEK
3 Month T-Bill 0.01% 0.01%
30 Year T -Bond 2.86% 3.05%
30 Year Fixed Mortgage 4.00% 4.00%
Slope of Yield Curve 2.86% 3.04%
Recession Probability-Future 0% 0%
5 out of 5 indicators are positive, the LTTS is positive, and the overall model is now in a HOLD mode.
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WEEKLY UPDATE – DECEMBER 16, 2011
LATEST MARKET OUTLOOK
MARKET INDICES:
INDEX VALUE %CHANGE
|
S&P500=
|
1,220
|
-2.83
|
|
DJIA =
|
11,866
|
-2.61
|
|
Nasdaq=
|
2,555
|
-3.46
|
INDICATORS: THIS WEEK LAST WEEK STATUS
1. Treasury Yield Slope (%) = +2.86 +3.09 +
2. Fwd PE Ratio = 17.42 17.93 +
3. Put/Call Ratio (PCR) = 1.07 1.07 +
4. Real GDP (Annual % growth) = 2.0 2.0 +
5. Core CPI (Annual % growth) = 2.0 2.0 +
6. LTTS Signal (%) -0.30 +0.15 HOLD
CURRENT ADVICE:
1. The Long Term Trend Signal (LTTS %) turned negative this week. The long-term outlook for the market is uncertain.
2. The PI model is a HOLD, and new money destined for the stock portion of your asset allocation should be placed in Money Market funds.
DISCUSSION:
1. US markets dropped after EU leaders and member nations started bickering about the details of their closer fiscal ties. In spite of high unemployment, US consumers continue to spend and the retailers are reporting high foot traffic in their stores. The S&P500 fell -2.83% lower, closing at 1,220, while the DJIA was down -2.61%, closing at 11,866. The NASDAQ was lower by -3.46%, and closed at 2,555. The overall S&P500 is up +80.33% since the low of 676.53 on March 9, 2009. The market is -22.05% below the market peak of 1,565.15 set on October 9th 2007.
2. The PI model flashed a BUY signal as of October 28th. The LTTS signal has been bouncing around its neutral level and switched to negative again at -0.30. We bought equity holdings on 10/28, and recommend that new money destined for the equity portion of your portfolio be held in Money Market funds. All our other indicators remain positive, and are indicating a slow growing economy with no signs of a recession.
3. The PCR moved sideways to slightly higher, closing at 1.07. The last bottom established on Oct 3 at 1,099.33 is still the low for this cycle. The lower resistance level for the market is now at 1,204.49. If it breaks through and closes below this level, then it could fall quite a bit further (see the details on our “Members Only” Latest Data Page). Join our FREE membership to receive special bulletins, advance warning of optimal entry points for the market, and analysis of financial news.
4. The “Current Recession Indicator” shows that we are currently not in a recession. Interest rate data follows:
ITEM DESCRIPTION LAST WEEK THIS WEEK
3 Month T-Bill 0.01% 0.01%
30 Year T -Bond 3.10% 3.10%
30 Year Fixed Mortgage 4.00% 4.00%
Slope of Yield Curve 3.09% 3.09%
Recession Probability-Future 0% 0%
5 out of 5 indicators are positive, the LTTS is negative, and the overall model is now in a HOLD mode.
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WEEKLY UPDATE – DECEMBER 9, 2011
LATEST MARKET OUTLOOK
MARKET INDICES:
INDEX VALUE %CHANGE
|
S&P500=
|
1,255
|
+0.88
|
|
DJIA =
|
12,184
|
+1.37
|
|
Nasdaq=
|
2,647
|
+0.76
|
INDICATORS: THIS WEEK LAST WEEK STATUS
1. Treasury Yield Slope (%) = +3.09 +3.01 +
2. Fwd PE Ratio = 17.93 17.78 +
3. Put/Call Ratio (PCR) = 1.07 1.07 +
4. Real GDP (Annual % growth) = 2.0 2.0 +
5. Core CPI (Annual % growth) = 2.0 2.0 +
6. LTTS Signal (%) +0.15 -0.86 BUY
CURRENT ADVICE:
1. The Long Term Trend Signal (LTTS %) turned positive this week. The long-term outlook for the market is higher.
2. The PI model is a BUY, and new money destined for the stock portion of your asset allocation should be Dollar Cost Averaged into the market.
DISCUSSION:
1. US markets closed slightly higher, but after some pretty wild swings during the week. The EU leaders and member nations agreed to closer fiscal ties and US consumer confidence rose to its highest level in 6 months. The S&P500 rose +0.88% higher, closing at 1,255, while the DJIA was up +1.37%, closing at 12,184. The NASDAQ was higher by +0.76%, and closed at 2,647. The overall S&P500 is up +85.50% since the low of 676.53 on March 9, 2009. The market is -19.81% below the market peak of 1,565.15 set on October 9th 2007.
2. The PI model flashed a BUY signal as of October 28th. After turning negative three weeks ago, LTTS signal turned positive again, and closed at +0.15. We bought equity holdings on 10/28, and recommend that new money destined for the equity portion of your portfolio be Dollar Coat Averaged into equities. All our other indicators remain positive, and are indicating a slow growing economy with no signs of a recession.
3. The PCR continues to move lower, closing at 1.04. The last bottom established on Oct 3 at 1,099.33 is still the low for this cycle. The market roared up through last week’s overhead resistance level of 1,204.49, which now becomes the lower resistance level. (see the details on our “Members Only” Latest Data Page). Join our FREE membership to receive special bulletins, advance warning of optimal entry points for the market, and analysis of financial news.
4. The “Current Recession Indicator” shows that we are currently not in a recession. Interest rate data follows:
ITEM DESCRIPTION LAST WEEK THIS WEEK
3 Month T-Bill 0.02% 0.01%
30 Year T -Bond 3.03% 3.10%
30 Year Fixed Mortgage 4.00% 4.00%
Slope of Yield Curve 3.01% 3.09%
Recession Probability-Future 0% 0%
5 out of 5 indicators are positive, the LTTS is also positive, and the overall model is now in a BUY mode.
***************************************************************************************************WWEEKLY UPDATE – DECEMBER 2, 2011
LATEST MARKET OUTLOOK
MARKET INDICES:
INDEX VALUE %CHANGE
|
S&P500=
|
1,244
|
+7.39
|
|
DJIA =
|
12,019
|
+7.01
|
|
Nasdaq=
|
2,627
|
+7.59
|
INDICATORS: THIS WEEK LAST WEEK STATUS
1. Treasury Yield Slope (%) = +3.01 +2.90 +
2. Fwd PE Ratio = 17.78 16.55 +
3. Put/Call Ratio (PCR) = 1.07 1.16 +
4. Real GDP (Annual % growth) = 2.0 2.0 +
5. Core CPI (Annual % growth) = 2.0 2.0 +
6. LTTS Signal (%) -0.86 -2.21 SELL
CURRENT ADVICE:
1. The Long Term Trend Signal (LTTS %) recovered and is slightly negative. The long-term outlook for the market is not clear.
2. The PI model is a HOLD, and new money destined for the stock portion of your asset allocation should be placed in Money Market Funds.
DISCUSSION:
1. The EU finally acted, expanding the role of the EFSF (European Financial Stability Facility). A coordinated move by central banks worldwide to inject liquidity into the EU banks makes dollar financing cheaper, thereby holding down their high bond yields. China also cut interest rates signaling that they are refocused on growth and not inflation. A massive rally followed, with US markets jumping higher than they have since 2009. US economic data continues to show steady gains, with 120,000 jobs created in Nov and the unemployment rate dropping to 8.6%. The S&P500 leapt +7.39% higher, closing at 1,244, while the DJIA jumped +7.01%, closing at 12,019. The NASDAQ was higher by +7.59%, and closed at 2,627. The overall S&P500 is up +83.88% since the low of 676.53 on March 9, 2009. The market is -20.52% below the market peak of 1,565.15 set on October 9th 2007.
2. The PI model flashed a BUY signal as of October 28th. After turning negative two weeks ago, LTTS signal is again moving higher and closed at -0.86. We bought equity holdings on 10/28, but have now placed the model ON HOLD as we await more data. The actions by the EU sparked this rally, but investors remain Euro focussed and there are a lot of ways in which the present “agreement in principle” can fall apart. All our other indicators remain positive, in spite of the 3rd quarter GDP growth being revised down to 2.0%.
3. The PCR moved slightly lower, closing at 1.07. The last bottom established on Oct 3 at 1,099.33 is still the low for this cycle. The market roared up through last week’s overhead resistance level of 1,204.49, which now becomes the lower resistance level. (see the details on our “Members Only” Latest Data Page). Join our FREE membership to receive special bulletins, advance warning of optimal entry points for the market, and analysis of financial news.
4. The “Current Recession Indicator” shows that we are currently not in a recession. Interest rate data follows:
ITEM DESCRIPTION LAST WEEK THIS WEEK
3 Month T-Bill 0.02% 0.02%
30 Year T -Bond 2.92% 3.03%
30 Year Fixed Mortgage 4.00% 4.00%
Slope of Yield Curve 2.90% 3.01%
Recession Probability-Future 0% 0%
5 out of 5 indicators are positive, the LTTS is a SELL, and the overall model is now in a HOLD mode.
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WEEKLY UPDATE – NOVEMBER 25, 2011
LATEST MARKET OUTLOOK
MARKET INDICES:
INDEX VALUE %CHANGE
|
S&P500=
|
1,159
|
-4.69
|
|
DJIA =
|
11,232
|
-4.78
|
|
Nasdaq=
|
2,442
|
-5.09
|
INDICATORS: THIS WEEK LAST WEEK STATUS
1. Treasury Yield Slope (%) = +2.90 +2.98 +
2. Fwd PE Ratio = 16.55 17.37 +
3. Put/Call Ratio (PCR) = 1.16 1.14 +
4. Real GDP (Annual % growth) = 2.0 2.5 +
5. Core CPI (Annual % growth) = 2.0 2.0 +
6. LTTS Signal (%) -2.21 +0.21 SELL
CURRENT ADVICE:
1. The Long Term Trend Signal (LTTS %) fell sharply to slightly negative territory. The long-term outlook for the market is not clear.
2. The PI model is a HOLD, and new money destined for the stock portion of your asset allocation should be placed in Money Market Funds.
DISCUSSION:
1. The EU leaders are frozen and unable or unwilling to make any meaningful economic decisions. Talk of further “haircuts” to Greek bondholders to an amazing 75% loss in principal, caused investors to shy away from all EU country bonds. Rates jumped in Spain, Hungary, and especially worrisome in Italy. The US economic data continues to point to a slow growing economy, with higher consumer spending, but nobody really seems to care. The S&P500 fell -4.69%, closing at 1,159, while the DJIA fell -4.78%, closing at 11,232. The NASDAQ fell by -5.09%, and closed at 2,442. The overall S&P500 is up +71.32% since the low of 676.53 on March 9, 2009. The market is -25.95% below the market peak of 1,565.15 set on October 9th 2007.
2. The PI model flashed a BUY signal as of October 28th, but the LTTS signal has now turned negative to -2.21. We bought equity holdings on 10/28, but have now placed the model ON HOLD as we await more data. All other indicators remain positive, in spite of the 3rd quarter GDP growth being revised down to 2.0%. The market had priced in that the EU would not let Greece default or let the EU banks go under, but that is not quite so certain any more. Nervousness set in as bond yields in the core EU countries jumped higher, and even Germany was unable to sell all the bonds it was auctioning.
3. The PCR moved sideways to slightly higher, closing at 1.16. The last bottom established on Oct 3 at 1,099.33 is still the low for this cycle. Since the market has fallen through the resistance level of 1,204.49, it is quite likely that it will re-test this low level (see the details on our “Members Only” Latest Data Page). Join our FREE membership to receive special bulletins, advance warning of optimal entry points for the market, and analysis of financial news.
4. The “Current Recession Indicator” shows that we are currently not in a recession. Interest rate data follows:
ITEM DESCRIPTION LAST WEEK THIS WEEK
3 Month T-Bill 0.01% 0.02%
30 Year T -Bond 2.99% 2.92%
30 Year Fixed Mortgage 4.00% 4.00%
Slope of Yield Curve 2.98% 2.90%
Recession Probability-Future 0% 0%
3 out of 5 indicators are positive, the LTTS is a BUY, and the overall model is now in a BUY mode.
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WEEKLY UPDATE – NOVEMBER 18, 2011
LATEST MARKET OUTLOOK
MARKET INDICES:
INDEX VALUE %CHANGE
|
S&P500=
|
1,216
|
-3.81
|
|
DJIA =
|
11,796
|
-2.94
|
|
Nasdaq=
|
2,573
|
-3.97
|
INDICATORS: THIS WEEK LAST WEEK STATUS
1. Treasury Yield Slope (%) = +2.98 +3.11 +
2. Fwd PE Ratio = 17.37 18.06 +
3. Put/Call Ratio (PCR) = 1.14 1.13 +
4. Real GDP (Annual % growth) = 2.5 2.5 +
5. Core CPI (Annual % growth) = 2.0 2.0 +
6. LTTS Signal (%) +0.21 +1.27 BUY
CURRENT ADVICE:
1. The Long Term Trend Signal (LTTS %) continues to move higher into more POSITIVE values. The long-term outlook for the market is higher.
2. The PI model is a BUY, and new money destined for the stock portion of your asset allocation should be invested in equities.
DISCUSSION:
1. Europe continues to dominate the markets, and investors completely ignored the slow but steady improvement in the US economy. Q3 corporate earnings grew a robust 16%, the Leading Economic Indicators improved, as did the weekly jobs picture. The S&P500 fell -3.81%, closing at 1,216, while the DJIA fell -2.94%, closing at 11,796. The NASDAQ fell by -3.97%, and closed at 2,573. The overall S&P500 is up +79.74% since the low of 676.53 on March 9, 2009. The market is -22.31% below the market peak of 1,565.15 set on October 9th 2007.
2. The PI model flashed a BUY signal as of October 28th, as the Real GDP turned positive, but the LTTS signal has now pulled back to +0.21. We bought equity holdings to the extent of our portfolio allocation on Oct 28th. The market has priced in that the EU will not let Greece default or let the EU banks go under, and that the austerity measures in Greece and Italy will succeed. Expect large disagreements and more volatility as these difficult measures are implemented.
3. The PCR moved slightly higher, closing at 1.14. It appears that bottom was established on Oct 3 at 1,099.33 is the low for this cycle. The market then rebounded, broke through the upper ceiling of the trading range at 1,204.49, which now is the low side resistance level. The question is whether this level will hold or will we drop through and test the previous bottom (see the details on our “Members Only” Latest Data Page). Join our FREE membership to receive special bulletins, advance warning of optimal entry points for the market, and analysis of financial news.
4. The “Current Recession Indicator” shows that we are currently not in a recession. Interest rate data follows:
ITEM DESCRIPTION LAST WEEK THIS WEEK
3 Month T-Bill 0.01% 0.01%
30 Year T -Bond 3.12% 2.99%
30 Year Fixed Mortgage 4.00% 4.00%
Slope of Yield Curve 3.08% 2.99%
Recession Probability-Future 0% 0%
3 out of 5 indicators are positive, the LTTS is a BUY, and the overall model is now in a BUY mode.
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WEEKLY UPDATE – NOVEMBER 11, 2011
LATEST MARKET OUTLOOK
MARKET INDICES:
INDEX VALUE %CHANGE
|
S&P500=
|
1,264
|
+0.85
|
|
DJIA =
|
12,154
|
+1.42
|
|
Nasdaq=
|
2,679
|
-0.28
|
INDICATORS: THIS WEEK LAST WEEK STATUS
1. Treasury Yield Slope (%) = +3.11 +3.08 +
2. Fwd PE Ratio = 18.06 17.09 +
3. Put/Call Ratio (PCR) = 1.13 1.13 +
4. Real GDP (Annual % growth) = 2.5 2.5 +
5. Core CPI (Annual % growth) = 2.0 2.0 +
6. LTTS Signal (%) +1.27 +0.73 BUY
CURRENT ADVICE:
1. The Long Term Trend Signal (LTTS %) continues to move higher into more POSITIVE values. The long-term outlook for the market is higher.
2. The PI model is a BUY, and new money destined for the stock portion of your asset allocation should be invested in equities.
DISCUSSION:
1. Europe dominated the markets, with a horrendous 400 DJIA point decline on Tuesday, followed by a full recovery by Friday. The crisis forced resignations of the financially inept Prime Ministers of Greece and Italy, and that of the even more clueless Claude Trichet head of the ECB (equivalent of the Federal Reserve), all of whom were replaced by economy-savvy persons. Third quarter US corporate earnings grew at 16%, but remain largely ignored by investors. The S&P500 rose +0.85%, closing at 1,264, while the DJIA was +1.42% higher, closing at 12,154. The NASDAQ fell by -0.28%, and closed at 2,679. The overall S&P500 is up +86.84% since the low of 676.53 on March 9, 2009. The market is -19.24% below the market peak of 1,565.15 set on October 9th 2007.
2. The PI model flashed a BUY signal as of October 28th, as the Real GDP turned positive, and the LTTS signal is now at +1.27. We bought equity holdings to the extent of our portfolio allocation on Oct 28th. The market has priced in that the EU will not let Greece default or let the EU banks go under, and that the austerity measures in Greece and Italy will succeed. Expect large disagreements and more volatility as these difficult measures are implemented.
3. The PCR moved sideways, closing at the same level as last week at 1.13. It appears that bottom was established on Oct 3 at 1,099.33 is the low for this cycle. The market then rebounded and broke through the upper ceiling of the trading range at 1,204.49, which now is the low side resistance level (see the details on our “Members Only” Latest Data Page). Join our FREE membership to receive special bulletins, advance warning of optimal entry points for the market, and analysis of financial news.
4. The “Current Recession Indicator” shows that we are currently not in a recession. Interest rate data follows:
ITEM DESCRIPTION LAST WEEK THIS WEEK
3 Month T-Bill 0.01% 0.01%
30 Year T -Bond 3.09% 3.12%
30 Year Fixed Mortgage 4.00% 4.00%
Slope of Yield Curve 3.08% 3.11%
Recession Probability-Future 0% 0%
3 out of 5 indicators are positive, the LTTS is a BUY, and the overall model is now in a BUY mode.
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WEEKLY UPDATE – NOVEMBER 4, 2011
LATEST MARKET OUTLOOK
MARKET INDICES:
INDEX VALUE %CHANGE
|
S&P500=
|
1,253
|
-2.48
|
|
DJIA =
|
11,983
|
-2.03
|
|
Nasdaq=
|
2,686
|
-1.86
|
INDICATORS: THIS WEEK LAST WEEK STATUS
1. Treasury Yield Slope (%) = +3.08 +3.35 +
2. Fwd PE Ratio = 17.09 18.36 +
3. Put/Call Ratio (PCR) = 1.13 1.09 +
4. Real GDP (Annual % growth) = 2.5 1.0 +
5. Core CPI (Annual % growth) = 2.0 2.0 +
6. LTTS Signal (%) +0.73 +0.27 BUY
CURRENT ADVICE:
1. The Long Term Trend Signal (LTTS %) continues to move higher into more POSITIVE values. The long-term outlook for the market is higher.
2. The PI model is a BUY, and new money destined for the stock portion of your asset allocation should be invested in equities.
DISCUSSION:
1. The US economy continues to grow at a slow pace, and the consumer is still spending in spite of poor confidence numbers. Stocks fell on further uncertainty in Greece, and concerns about widening yield spreads between Italian and German bonds. Third quarter US corporate earnings grew at 16%, but remain largely ignored by investors. The S&P500 fell -2.48%, closing at 1,253, while the DJIA was -2.03% lower, closing at 11,983. The NASDAQ fell by -1.86%, and closed at 2,686. The overall S&P500 is up +85.21% since the low of 676.53 on March 9, 2009. The market is -19.94% below the market peak of 1,565.15 set on October 9th 2007.
2. The PI model flashed a BUY signal as of October 28th, as the Real GDP turned positive, and the LTTS signal is now at +0.73. We bought equity holdings to the extent of our portfolio allocation on Oct 28th. The market has priced in that the EU will not let Greece default or let the EU banks go under. This is very premature as all they have is a political agreement that lacks details of how this will actually be implemented. Expect to see the market be very volatile as these details come out.
3. The PCR moved slightly higher, closing at 1.13. It appears that bottom was established on Oct 3 at 1,099.33 is the low for this cycle. The market then rebounded and broke through the upper ceiling of the trading range at 1,204.49, which now is the low side resistance level (see the details on our “Members Only” Latest Data Page). Join our FREE membership to receive special bulletins, advance warning of optimal entry points for the market, and analysis of financial news.
4. The “Current Recession Indicator” shows that we are currently not in a recession. Interest rate data follows:
ITEM DESCRIPTION LAST WEEK THIS WEEK
3 Month T-Bill 0.01% 0.01%
30 Year T -Bond 3.36% 3.09%
30 Year Fixed Mortgage 4.00% 4.00%
Slope of Yield Curve 3.35% 3.08%
Recession Probability-Future 0% 0%
3 out of 5 indicators are positive, the LTTS is a BUY, and the overall model is now in a BUY mode.
***************************************************************************************************
WEEKLY UPDATE – OCTOBER 28, 2011
LATEST MARKET OUTLOOK
MARKET INDICES:
INDEX VALUE %CHANGE
|
S&P500=
|
1,285
|
+3.78
|
|
DJIA =
|
12,231
|
+3.58
|
|
Nasdaq=
|
2,737
|
+3.78
|
INDICATORS: THIS WEEK LAST WEEK STATUS
1. Treasury Yield Slope (%) = +3.35 +3.24 +
2. Fwd PE Ratio = 18.36 17.61 +
3. Put/Call Ratio (PCR) = 1.09 0.99 +
4. Real GDP (Annual % growth) = 2.5 1.0 +
5. Core CPI (Annual % growth) = 2.0 2.0 +
6. LTTS Signal (%) +0.27 -2.28 BUY
CURRENT ADVICE:
1. The Real GDP growth for Q3 was reported at +2.5%, and this has now turned all 5 indicators positive. The Long Term Trend Signal (LTTS %) has also turned POSITIVE, so that the long-term outlook for the market is higher.
2. The PI model is a BUY, and new money destined for the stock portion of your asset allocation should be invested in equities.
DISCUSSION:
1. Stocks jumped higher for the week as the EU leaders presented a proposal for preventing a default by Greece, the 3rd quarter GDP was higher than expected, and US corporate earnings remain positive. The S&P500 rose +3.78%, closing at 1,285, while the DJIA was +3.58% higher, closing at 12,231. The NASDAQ rose by +3.78%, and closed at 2,737. The overall S&P500 is up +89.94% since the low of 676.53 on March 9, 2009. The market is -17.90% below the market peak of 1,565.15 set on October 9th 2007.
2. The PI model flashed a BUY signal as of October 28th, as the Real GDP turned positive, and the LTTS signal turned around and moved up to +0.27. We bought equity holdings to the extent of our portfolio allocation on Oct 28th. The market has priced in that the EU will not let Greece default or let the EU banks go under. This is very premature as all they have is a political agreement that lacks details of how this will actually be implemented. Expect to see the market be very volatile as these details come out.
3. The PCR moved sideways to slightly higher, closing at 1.09. It appears that bottom was established on Oct 3 at 1,099.33 is the low for this cycle. The market then rebounded and broke through the upper ceiling of the trading range, which now becomes the low side resistance level (see the details on our “Members Only” Latest Data Page). Join our FREE membership to receive special bulletins, advance warning of optimal entry points for the market, and analysis of financial news.
4. The “Current Recession Indicator” shows that we are currently not in a recession. Interest rate data follows:
ITEM DESCRIPTION LAST WEEK THIS WEEK
3 Month T-Bill 0.02% 0.01%
30 Year T -Bond 3.26% 3.36%
30 Year Fixed Mortgage 4.00% 4.00%
Slope of Yield Curve 3.35% 3.24%
Recession Probability-Future 0% 0%
3 out of 5 indicators are positive, the LTTS is a BUY, and the overall model is now in a BUY mode.
***************************************************************************************************
WEEKLY UPDATE – OCTOBER 21, 2011
LATEST MARKET OUTLOOK
MARKET INDICES:
INDEX VALUE %CHANGE
|
S&P500=
|
1,238
|
1.12
|
|
DJIA =
|
11,809
|
1.41
|
|
Nasdaq=
|
2,637
|
-1.14
|
INDICATORS: THIS WEEK LAST WEEK STATUS
1. Treasury Yield Slope (%) = +3.26 +3.22 +
2. Fwd PE Ratio = 17.61 16.51 +
3. Put/Call Ratio (PCR) = 0.99 0.86 +
4. Real GDP (Annual % growth) = 1.0 1.0 -
5. Core CPI (Annual % growth) = 2.0 2.0 +
6. LTTS Signal (%) -2.28 -2.75 SELL
CURRENT ADVICE:
1. 4 out of 5 indicators are positive, and core inflation has now moved into the caution zone. The Long Term Trend Signal (LTTS %) is NEGATIVE. The long-term outlook for the market is down.
2. The PI model is a SELL, and new money destined for the stock portion of your asset allocation should be held in Money Market Funds.
DISCUSSION:
1. Stocks traded up for the week on hope that the meeting of EU leaders would result in some plan for preventing a default by Greece and with reasonably good 3rd quarter US corporate earnings. The S&P500 rose +1.12%, closing at 1,238, while the DJIA was +1.41% higher, closing at 11,809. The NASDAQ fell by -1.14%, and closed at 2,637. The overall S&P500 is up +82.99% since the low of 676.53 on March 9, 2009. The market is -20.90% below the market peak of 1,565.15 set on October 9th 2007.
2. The PI model is a SELL, and the LTTS signal has turned around and moved up to -2.75%. Our indicators say that there is a high probability that the market may drop further, and we sold our equity holdings on August 19th, and placed the proceeds in Money Market Funds. There is much optimism that the EU will find a way to prevent the Greek default and prevent the European banks from failing. The fact remains that significant amounts of money have to be injected into the system, and it remains to be seen if the German and French are willing to subsidize the other EU countries that continue to be in fiscal trouble.
3. The PCR dropped and moved sideways closing at 0.99, and this indicator has turned positive. The peak and sharp pullback of 7 weeks ago signals that the market established a short-bottom. That bottom was briefly pierced when the market fell through on Oct 3 to 1,099.33 before rebounding, and has now broken through the upper ceiling of the trading range (see the details on our “Members Only” Latest Data Page). Join our FREE membership to receive special bulletins, advance warning of optimal entry points for the market, and analysis of financial news.
4. The “Current Recession Indicator” shows that we are currently not in a recession. Interest rate data follows:
ITEM DESCRIPTION LAST WEEK THIS WEEK
3 Month T-Bill 0.02% 0.02%
30 Year T -Bond 3.33% 3.26%
30 Year Fixed Mortgage 4.00% 4.00%
Slope of Yield Curve 3.20% 3.26%
Recession Probability-Future 0% 0%
4 out of 5 indicators are positive, the LTTS is a SELL, and the overall model is now in a SELL mode.
***************************************************************************************************
WEEKLY UPDATE – OCTOBER 7, 2011
LATEST MARKET OUTLOOK
MARKET INDICES:
INDEX VALUE %CHANGE
|
S&P500=
|
1,155
|
+2.12
|
|
DJIA =
|
11,103
|
+1.74
|
|
Nasdaq=
|
2,479
|
+2.65
|
INDICATORS: THIS WEEK LAST WEEK STATUS
1. Treasury Yield Slope (%) = +3.01 +2.88 +
2. Fwd PE Ratio = 16.51 16.16 +
3. Put/Call Ratio (PCR) = 1.20 1.20 -
4. Real GDP (Annual % growth) = 1.0 1.0 -
5. Core CPI (Annual % growth) = 2.0 2.0 +
6. LTTS Signal (%) -3.33 -3.16 SELL
CURRENT ADVICE:
1. 3 out of 5 indicators are positive, and core inflation has now moved into the caution zone. The Long Term Trend Signal (LTTS %) is NEGATIVE. The long-term outlook for the market is down.
2. The PI model is a SELL, and new money destined for the stock portion of your asset allocation should be held in Money Market Funds.
DISCUSSION:
1. Stocks traded up slightly for the week as an imminent Greece default, ratings cuts of and concerns about European bank failures offset a better than expected payrolls report. The S&P500 rose +2.12%, closing at 1,155, while the DJIA was +1.74% higher, closing at 11,103. The NASDAQ rose by +2.65%, and closed at 2,479. The overall S&P500 is up +70.72% since the low of 676.53 on March 9, 2009. The market is -26.21% below the market peak of 1,565.15 set on October 9th 2007.
2. The PI model is a SELL, and the LTTS signal moved further negative to -3.33%. Our indicators say that there is a high probability that the market will drop further, and we sold our equity holdings on August 19th, and placed the proceeds in Money Market Funds.
The chances of a whipsaw to the upside and large market advance appears to be remote at this time. We have completely exited the equity market and placed the proceeds in Money Market Funds.
3. The PCR remained unchanged at a very high 1.20 and this indicator remains negative. The peak and sharp pullback of 5 weeks ago signals that the market established a short-bottom. That bottom was briefly pierced when the market fell through on Oct 3 to 1,099.33 before rebounding. However this is not likely the low for this cycle (see the details on our “Members Only” Latest Data Page). Diversification of assets between equities and fixed income saved our portfolio in 2008, and will do so again. Join our FREE membership to receive special bulletins, advance warning of optimal entry points for the market, and analysis of financial news.
4. The “Current Recession Indicator” shows that we are currently not in a recession. Interest rate data follows:
ITEM DESCRIPTION LAST WEEK THIS WEEK
3 Month T-Bill 0.02% 0.01%
30 Year T -Bond 2.90% 3.02%
30 Year Fixed Mortgage 4.00% 4.00%
Slope of Yield Curve 2.88% 3.01%
Recession Probability-Future 0% 0%
3 out of 5 indicators are positive, the LTTS is a SELL, and the overall model is now in a SELL mode.
***************************************************************************************************
WEEKLY UPDATE – SEPTEMBER 30, 2011
LATEST MARKET OUTLOOK
MARKET INDICES:
INDEX VALUE %CHANGE
|
S&P500=
|
1,131
|
-0.44
|
|
DJIA =
|
10,913
|
+1.32
|
|
Nasdaq=
|
2,415
|
-2.73
|
INDICATORS: THIS WEEK LAST WEEK STATUS
1. Treasury Yield Slope (%) = +2.88 +2.88 +
2. Fwd PE Ratio = 16.16 16.23 +
3. Put/Call Ratio (PCR) = 1.21 1.20 -
4. Real GDP (Annual % growth) = 1.0 1.0 -
5. Core CPI (Annual % growth) = 2.0 2.0 +
6. LTTS Signal (%) -3.16 -2.59 SELL
CURRENT ADVICE:
1. 3 out of 5 indicators are positive, and core inflation has now moved into the caution zone. The Long Term Trend Signal (LTTS %) is NEGATIVE. The long-term outlook for the market is down.
2. The PI model is a SELL, and new money destined for the stock portion of your asset allocation should be held in Money Market Funds.
DISCUSSION:
1. Stocks swung wildly all week and ended up mixed to slightly lower. Commodities continue to fall, especially Copper, which plummeted on concerns of global slowdown, especially signs of slower growth in China. The S&P500 fell -0.44%, closing at 1,131, while the DJIA was +1.32% higher, closing at 10,913. The NASDAQ fell by -2.73%, and closed at 2,415. The overall S&P500 is up +67.18% since the low of 676.53 on March 9, 2009. The market is -27.74% below the market peak of 1,565.15 set on October 9th 2007.
2. The PI model is a SELL, and the LTTS signal moved further negative to -3.16%. Our indicators say that there is a high probability that the market will drop further, and we sold our equity holdings on August 19th, and placed the proceeds in Money Market Funds.
The chances of a whipsaw to the upside and large market advance appears to be remote at this time. I recommend selling taxable positions also and exiting the equity market. The extreme volatility will continue, so take advantage of this and exit on a day when the market is jumping higher.
3. The pullback of 4 weeks ago signals that the market established a short-bottom. However this is clearly not the low for this cycle (see the details on our “Members Only” Latest Data Page). Diversification of assets between equities and fixed income saved our portfolio in 2008, and will do so again. Join our FREE membership to receive special bulletins, advance warning of optimal entry points for the market, and analysis of fi.
