If you read my past
blogs, you’ll see a definite schizophrenic pattern. I have agreed with John Hussman and warned
that a crash is coming; but I have also predicted 4 or 5% gain followed by a
near-term correction and long-term top in the vicinity of 1550. Can we have both?…or all three? Perhaps so, if the economy doesn’t tank
before we get to the old 1550 top; but there’s plenty of schizophrenia out
there:
Marc Chaikin says we
can go up from here:
“Small
Pullback Equals Big Opportunity” from seeking Alpha:
“After a brief three-day pullback in
stocks and a small rally in bonds, we are still left with the same reality;
stocks have now outperformed bonds for almost six months, but investors are
just now waking up to that fact…When stocks have outperformed bonds by a wide
margin over the past 40 years (> 1,000 basis points) the stock market has
continued higher in the next quarter with an average gain of > 4.5% and been
up more than 85% of the time.” Full
story at: http://seekingalpha.com/article/454401-small-pullback-equals-big-opportunity
John Hussman, PhD, continues to warn
of extreme valuations and risk to the economy: In today’s market commentary he
wrote,
“As we examine the present evidence
relating to both the financial markets and the global economy, the aspect that
strikes us most is the extent to which Wall Street continues to emphasize
superficially positive data in preference for deeper analysis, to extrapolate
short-term distortions as if they were long-term trends, and to misconstrue
freshly printed wallpaper and thin supporting ice as if they were solid walls
and floors.”
Mr. Hussman
suggested that valuations are extreme and characterized the Market Climate as follows: “The Market Climate for stocks remains
characterized by an unusually hostile set of indicator syndromes, most notably,
an "overvalued, overbought, overbullish, rising-yields" syndrome that
has historically been unfavorable for stocks regardless of prevailing Fed
policy or trend-following indicators.”
Read
his Weekly Market Commentary at http://www.hussmanfunds.com/index.html
THE MARKET
The S&P 500 was up
1.4%% Monday to 1417 and VIX fell 3.8% to 14.3.
NTSM
The NTSM analysis moved
to BUY Monday.
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).
