John
Hussman, PhD, noted in his 5 December 2011 Weekly Market Comment, “…recent U.S.
economic reports have improved modestly from the clearly negative momentum that
we saw in late-summer. Unfortunately, the underlying recessionary pressures we
observe are largely unchanged. When we take the present set of economic
evidence in its entirety, we see very little evidence of a meaningful reduction
in recession risks. Indeed, the evidence from the rest of the world, both
developed and developing, reinforces the expectation that the global economy is
approaching a fresh contraction.” He suggested
that the chances of recession based on his analysis of 20-binary recession
indicators are around 85%. – Full comment at: http://www.hussmanfunds.com/wmc/wmc111205.htm
That’s
just another indication that we’ll need to be on our toes. I still think John Hussman is right, but I am
not an economist. My opinion is based on
Mr. Hussman’s rigorous methodology. As always,
it’s the timing that is hard to call.
Today,
Monday, the S&P 500 went up 1% while the VIX rose slightly over 1%. That’s an indication that the Options market
is not sold on the direction of the market since the VIX usually moves opposite
to the S&P. The rise in VIX was not enough
to affect the NTSM rating.
The NTSM analysis remains BUY.
I
bought back into the stock market at S&P 500, 1155 on 7 Oct after the 6 Oct
NTSM buy signal. I remain 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
am 90% long in the trading portfolio.
Just
a reminder: 100% invested in stocks is way too much for most rational
folks. Don’t do it unless you have a
high tolerance for risk.
