Clark Yingst, the chief market analyst at
Joseph Gunnar, warned
in a Yahoo interview that we could see back to back earnings declines.
S&P 500 earnings growth rates have fallen
from +30% in Q4 of 2010 to +11% in Q2
of 2011 (from FactSet).
Q3 2011 is predicted to grow 12% so we may
actually reverse the downward trend, but Yingst said, "I think it is
entirely possible that we have an earnings recession.” He pointed out that analysts tend to
underestimate earnings when they are trending up and also when they are
trending down. - http://finance.yahoo.com/blogs/breakout/other-recession-getting-priced-market-185315818.html
Falling earnings growth is not a good sign,
but this isn’t something that we need to worry about for long. We will find out soon enough if Apple and IBM
(both gave earnings reports that disappointed the market) represent a trend or are
outliers.
On a CNBC interview today on the floor of the
stock exchange one of the pros pointed out that the news has been really bad
but the market isn’t going down much.
The conclusion – this market wants to go up.
Only Volume is bullish in the Navigate the
Stock Market system. (More volume has
been going to the up side.) Sentiment,
Price, and VIX are all neutral and NTMS moved to HOLD. That’s not terribly important since only a sell
signal would change our current bullish position in the market; but it does
show some deterioration of the NTMS indicators.
The NTSM analysis fell to HOLD 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).
The trading portfolio is all cash until we get a better idea of
market direction.
