You read it right…it
was a trade deficit; and it was big!
NEW YORK (CNNMoney) –
“China shocked the world this weekend when it announced its largest trade
deficit in more than two decades.
The country has long
been an export powerhouse, selling far more goods to foreigners than it buys in
the world marketplace. But in February, the world's second
largest economy imported $31.5 billion more goods and services
than it exported, China's General Administration of Customs reported Saturday.” Full story at: http://money.cnn.com/2012/03/12/news/economy/china_trade_deficit/index.htm?iid=HP_LN
This may be an
indication that the rest of the world is slowing rather than problems in China. If you asked John Hussman, PhD, of Hussman
Funds, that’s what he’d say. His weekly
commentary was typically, gloomy, though I appreciate his commentary for its
rigorous basis in economic analysis rather than anecdotal data that is so often
presented on the tube. (Gee, we can’t call it the tube anymore. Perhaps, “big-flat screen” would be more
accurate.) Mr. Hussman wrote,
“…the Market Climate
for stocks remains among the most negative 1.5% of historical instances...With
certainty, market conditions will shift in a way that removes the present
syndrome of overvalued, overbought, overbullish conditions. We don't know
whether that shift will involve a moderate retreat that removes the overbought
and overbullish aspects, or a major decline that removes the overvaluation, or
just maybe with a further advance that then corrects enough to clear this
syndrome at a higher level…”
Weekly Market
Commentary March 12, 2012, at:
He went on to make a very
easily understood point that he illustrated with a graph of the data. The lagging indicators (such as year-over-year
growth in payroll employment) trail the leading indicators (such as year-over-year
growth in real consumption) by several months.
The bottom line? Because leading indicators have dropped
significantly in the last 3-months, he suggested that we may see employment slowing
in March followed by job losses in April.
If that is the case we’ll see
panic in May! (Probably sooner.)
TODAY'S MARKET
VIX fell over 8% while
the S&P 500 finished basically unchanged.
NTSM
The NTSM analysis
remains HOLD today.
MY INVESTED POSITION
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.
