The
Nobel prize for economics was awarded to Thomas Sargent, for his work in
rational expectations...Regarding the 2009 fiscal stimulus package, he [Mr.
Sargent] observed "The calculations that I have seen supporting the
stimulus package are back-of-the-envelope ones that ignore what we have learned
in the past 60 years of macroeconomic research...I recall it being said that
there was widespread agreement of a big fiscal stimulus among the vast majority
of informed economists. [The President's] advisers surely knew that this was
not an accurate description of the full range of professional opinion." - from John Hussman, PhD, Weekly Market
Comment (17 Oct 2011) http://www.hussmanfunds.com/
I
thought a little reminder that there are experts, highly regarded in economics,
who don’t agree that Government stimulus of the economy is helpful.
At
mid-day, the VIX was up 2% and the S&P was basically flat. That sort of market action is often a
harbinger of a down-day so I went to all cash in the trading portfolio and took
profits. I use the QLD and the
Rydex RYVYX fund for trading. Both are
2x funds that double the gains (or losses) of the Nasdaq. They are high risk funds so there is reason
to be cautious, even though I am very long in the long-term portfolio.
The
NTSM analysis is still a BUY, but the VIX indicator is now a hold and it is not
falling fast enough to convince me this rally will continue. Option expiration on Friday may be affecting
the markets. Europe is still weighing on
the markets. We are news driven so the
NTMS technical indicators will be reactive.
Sentiment
is positive/neutral. Price action is
neutral. Volume is positive. VIX is
neutral. NTMS could switch to “Sell” in
a few days if the negative action continues.
NTMS
is BUY today.
I am 100% long in the long term portfolio (100% stocks in the 401k.).
(See the page “How to Use the NTSM System” – the link is on the right side of
this page).
I cut the trading portfolio position in the morning to 0% stocks
at a good profit.
