Are we there yet?

The chart below shows how much each index has retraced from its low.  The S&P 500 hit its high on 9 Oct 2007 at 1565.  It bottomed at 676 on 9 March 2009.  The S&P 500 is now about 78% recovered from its 2007 high.  {%= 1370-676 (Pts gained)/1565-676 (Pts lost) = 78%}

Nasdaq and the smaller cap stocks have recouped all of their losses since 2007. 

Chart from Chart of the Day at
http://www.chartoftheday.com/

The S&P 500 dropped 1/3% Friday to 1370. VIX was up slightly to 17.3.

The markets needed to pullback a little.  They can’t go up all the time.  My guess is that the market can get to its old high of 1560 or so before we see another major downturn. That’s only a guess though and corrections in the 10-15% range are always possible especially if we continue going up without any significant cooling off period.  All bets are off if a crisis erupts.

Today, Friday, the NTSM analysis remains BUY.  That’s not really a buy recommendation at this point; it just indicates we are generally positive on the market.    The real BUY recommendation was back in October.

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). 

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.