FRIDAY NEWS OF NOTE:
The Commerce
Department reported Friday that spending rose 0.8% in February and income rose
0.2%.
The University of
Michigan and Thomson Reuters said consumer sentiment reached its highest value
in more than a year in March
Excerpts from “Welcome to the new stock market bubble,” by
Cody Willard:
Willard wrote,“I said …we’d know… we were finally hitting bubble phase
when social networking and app-related IPOs started hitting the markets and
doubling on their first day...” He then
cited several recent examples and continued…“To be clear, I don’t think it’s time to panic because bubbles can and
usually do grow far beyond what you ever think is possible.” Full blog at…
SHILLER CAPE
Now a curious note
from the Motley Fool…
“As of Friday's (a week ago) close, the
price-to-earnings ratio of the S&P 500 using 10-year inflation-adjusted
earnings -- the "Shiller P/E" (or as it is also known, CAPE) -- is 22.3, which is significantly above its
historical average (16.4). Nevertheless, Professor Robert Shiller of Yale --
the man who championed this valuation indicator -- told The Associated Press at
the beginning of the month that he doesn't believe we are in the middle of a
stock market bubble. He went on to say he would choose stocks if given the
choice to invest all of his money in stocks or Treasury inflation-protected
securities, arguing that "they're highly priced, and they’re risky, but
they’ve had a good historic record…” http://www.fool.com/investing/general/2012/03/29/5-signs-irrational-exuberance-is-back-and-2-actio.aspx
THE MARKET
The S&P 500 was up
0.4% Friday to 1408; this time it fell at the opening and recovered all day –
that remains encouraging. VIX closed at 15.5
– essentially unchanged.
The S&P 500 is 11%
above its 200-dMA.
NTSM
The NTSM analysis fell
to HOLD Friday.
The NTSM analysis is
an ensemble model that looks at 8-indicators and those indicators don’t always
agree. For that reason, the indicators
are weighted by their performance over the period from 2005-2010. VIX is our best indicator; VOLUME is second
best. They are both neutral 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).
Enjoy the weekend.
