The
Navigate the Stock Market analysis is still HOLD and shows little change from
yesterday.
The
S&P 500 had a nice rally on the employment news and then faded in the
afternoon. I never like to see a late
fade because it shows a lack of conviction.
Today’s
volumes improved, but really, light volume is normal AFTER a bottom because a
lot of investors don’t believe the bottom is in and tend to stay on the
sidelines in the early stages of a rally.
At this point the S&P has stayed above its trend line convincingly
and is now 1.5% above the trend line.
Should we wait until it gets to 3% above trend as classical technical
analysis would say? That would be about
1350. I don’t want to wait that long. I
think the down trend has switched to up; but that is in large part a guess
because there have been no statistically significant market days since the
recent low of 1257 on 16 March. I use
statistics to verify trends.
There
is one very troubling indicator.
Sentiment is getting overly bullish.
Yesterday % Bulls hit 71% for the day and the 5-day average is 59% at
the close today. If that trend continues,
we could see a Sell signal in a few weeks.
As
far as the fundamentals, the improving employment figures should keep the rally
going unless we get bad earnings reports (or projections from companies) this
quarter.
The
NTSM system can be late in calling a Buy after a short small drop (like we just
had) so I will probably get back in soon.
I
can’t seem to get really aggressive (e.g., my previous 100% all-in in stocks)
or enthusiastic about the market, because I’d like to see a couple more data points to verify this up trend or a
Buy signal from NTSM analysis, but that isn’t likely until we have some big
moves up.
I
am now 30% invested in stocks. I going
to look at some more data and post later if I decide to Buy on Monday.
