The Market
Here’s a fascinating chart from Yale by Robert
Shiller, PhD. It shows that the Confidence
that there will be no stock market crash in the succeeding six months is now
around 20%. In other words, only 20% of
investors are confident there won’t be a crash in the next 6-months. I overlaid the Dow(blue) / S&P (red)
above the Shiller chart and we can see that investors are almost always wrong! Like investor sentiment, a low reading in the
Confidence Index corresponds to a low point in the indices.
That makes us bulls a little happier; but I
still am concerned about Dr. Hussman’s recession forecast. Oh well. There is no black or white in the forecast
business. Our sentiment indicator is now
elevated, but the chart gives us a longer term value and indicates that the chances of a crash in the next 6-months are very low - though we could always see a correction.
Euro Crisis
The EU “good news” yesterday was about a new EU
pact, not Greece debt, so the market ignored the news. There have been some promises of an
announcement soon on the Greece debt issue.
We’ll see.
NTSM System
NTSM analysis remains BUY today…
…even though some of the indicators are
getting a little stretched. That doesn’t
mean we are going to get a sell signal, though it does raise the
possibility. I try not to guess the
future movement of the analysis, just as I try to avoid guessing the overall
market direction; but what the heck…why not?
I think we continue generally up though the market seems to want to
trade back to the lower trend line – now about 1280 on the S&P 500. I think that would be a short term move.
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).
