The Wednesday Update of the Navigate the Stock Market System

I posted this morning that a close above 1322 would produce a BUY in the Navigate the Stock Market (NTSM) system; tonight we have a BUY.

One of the posters over on the Investor Village website goes by the handle of “Old Fool” (Mr. McCranie, I believe.) I picked up my favorite investing phrase from him: “Trade what you see, not what you think.”  Nothing could be more apropos today.  I think there are so many issues it’s hard to buy stocks at this point.  On the other hand, I see the NTSM system turning positive so the odds for more upward movement are reasonably high.

 We are 17% from the previous high (1550 on the S&P 500) and only a little below the recent high of 1342.  I am very leery that we may not be able to get significantly above the 1343 level.  So….I will only switch to 50% invested in stocks.  I’ll wait longer to see if this dog has legs…or fleas.   It is possible that we could have a quick turn-around and call a Sell sooner than we’d like – so stay tuned. 

SUMMARY OF NTSM INDICATORS:

As of today’s close, our 4-areas of market analysis present the following picture:

SENTIMENT:  Neutral.  %-bulls indicator was 49% as of yesterday’s close.  This is normal in a downturn for the sentiment to reach high levels and then quickly switch as investor run to short the market as it falls.  It is unusual for the Sentiment to get to extreme levels (we were >65% for 5-days last week – that’s extreme) and not see a significant downturn in the market. 

PRICE: Buy.  The Price analysis indicator has been moved up and is now firmly in Buy territory.  It has been a Buy all but 2-days since 11 April.

VOLUME: Neutral.  Volume has been meandering around with little direction. Volume is Hold.  But with an up-day or two it could easily turn green too.

VIX:  Buy.  Our VIX indicator turned to a Buy yesterday and is even stronger today. 

SUMMARY: The overall Navigate the Stock Market analysis is BUY today. (See the page How to Use the NTSM System).

NTMS switched to SELL on 22 February.  Today’s change to BUY represents the 1^st change in position since 22 February and I will be upping my stock investments from 30% t0 50% tomorrow and closing short positions.