MLR - PMP 12/4/13

Published : December 4 2013 at 9:17 ET

The major market averages were down on higher volume though managed to close in the top half of their trading range. While the number of distribution days has piled up, quantitative easing remains a force to be reckoned with as the major averages have overall been trending higher all year with corrections generally contained to within 5%, even though leading stocks have suffered far worse on these minor corrections.

The president of the San Francisco Federal Reserve Bank, John Williams, said the Fed should only taper when it is “completely confident” the economy is on the right track. “My view would be that we would not be raising the funds rate even if the unemployment rate was below 6.5%, as long as inflation continued to be low, for some time,” Williams said.

This suggests as we have pointed out in prior reports that tapering is a lot further off than expected which in the meantime supports the continued uptrend which has been relentless this year, despite leading stocks being, on balance, difficult at best to buy and pyramid. Trend following systems have also hit brick walls this year as the trend has been manipulated higher by QE, thus while giving the illusion of a steady playable uptrend, is actually one of the most challenging market years we have seen for trend following in decades. The negative performance of the trend following wizards are one of several testaments to this.

Nuskin (NUS )had a continuation pocket pivot yesterday. Earnings and sales have accelerated strongly, group rank 47, ROE 38.1%. NUS has obeyed its 50dma for several months. We have reported on NUS in prior reports including prior pocket pivot and buyable gap up buy points.

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