I
suggested on 8 Dec that the S&P wanted to retreat to its lower trend line
and we shouldn’t be too concerned. Well,
here it is; the S&P backed up to where I have pegged the lower trend
line.
NTSM
uses a unique method of spotting the trend line. Many would look at the below chart and say we
are in a down trend – not me. As always,
it won’t be too much longer before we find out who is right.
It
is curious that all we hear on CNBC and around the web is how bad things are and
the markets can’t go up. If that is the
case, it is odd that the NTMS sentiment indicator (based on selected RYDEX
leveraged funds) is now at 56%-bulls as of yesterday’s close. It was only
44%-bulls just 2-weeks ago.
One
cautionary note: For the past month or so, the Morgan Stanley Cyclical index
(^CYC) has underperformed the S&P 500. That is an indication that more
investors are concerned about recession and may be a predictor of actual
recession.
The
NTSM analysis dropped to HOLD today.
The
future of NTSM (i.e., whether it switches to sell) depends on the VIX
indicator. Today the VIX indicator is
still positive on the market, and until proven otherwise, I am too.
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…and still cautiously optimistic.
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.
