Big
days like today (down more than 1%) can always cause some angst. In this case, I don’t think we should worry
much. There are some good things about
today. Today’s close is right on the
lower trend line that has now moved up to 1342.
On a price and volume basis, today’s close is in line with current up-trends and probably represents another short term low. Because I am optimistic about today’s action, I
will add some leveraged longs in the trading account tomorrow unless the market
takes off in the morning.
SUMMARY OF NTSM INDICATORS:
As
of today’s close, our 4-areas of market analysis present the following picture:
SENTIMENT: Neutral.
%-bulls indicator was 60% as of yesterday’s close (data is not available
until later tonight). 66% is our sell
point for this indicator and this indicator was sell 3-days ago. I figure when 2 out of every 3 people are
betting that the market will move up with leveraged mutual funds, it is time to
sell. (We’ve based that indicator on
years of comparison to moves in the S&P.)
This is a stat to watch, but it takes more than one indicator to turn
the entire NTSM system to sell. We had
2-weeks of high sentiment values in early April without an overall NTSM Sell
signal.
PRICE:
Neutral. The Price analysis indicator
moved into neutral territory today.
VOLUME:
Neutral. Volume has been relatively
balanced between the up and down moves in the S&P.
VIX: Buy.
Our VIX indicator turned to Buy 3-days ago.
SUMMARY:
NTMS switched to BUY on 20 April and it is HOLD today. The Hold puts us on alert that we might
reverse to a Sell, but that is far from certain. It is not at all unusual for NTSM to
fluctuate between Buy and Hold during a sustained upward movement of the
S&P 500.
I
remain 100% long in stocks. (See the page How to Use the NTSM System). That is way too aggressive for most people
and I don’t recommend it unless you have a high tolerance for risk. I may go to more than 100% if I add leveraged
longs tomorrow.
