GROWTH IN MANUFACTURING
From NJ.com
U.S stocks extended gains
as orders placed with U.S. factories rose in May for the first time in three
months…The 0.7 percent increase in bookings followed a revised 0.7 percent drop
in the prior month, the Commerce Department said today in Washington. The
median forecast of economists in a Bloomberg News survey called for a rise to
0.1 percent.
MARKET
Tuesday, the S&P 500
was up 0.62% to 1374. The VIX fell 0.83%
to 16.66.
Nice move up today for
those that were in the market. From my
perspective (currently out of the market), it was a meaningless day. Volume was so low that the data today is
suspect. The S&P 500 volume was 10%
of normal. The total volume on the NYSE
was about ½-normal recent volume. The S&P 500 volume
is suspiciously low. Since the NTSM
analysis is volume weighted, a low volume day will have little influence on the
Price and Volume indicators.
NTSM
The NTSM analysis is HOLD
again Tuesday, although again, indicators barely budged due to the low volume.
I ran the numbers using
both high volume and low volume data and there was no difference in the outcome. VIX also refuses to show a strong trend
either to the buy side or sell side, although the indicator is currently closer
to a buy than a sell. The Morgan Stanley
Cyclical index is also perking up and may signal an end to the correction
too. It appears from the charts that
the market is now in an up-trend, but it is scary that this is happening in a Holiday
week when most pros are out. The markets
closed early today, further skewing the data.
Can we trust this move?
So what do we have? - more
of the same. I hate to see the market
higher than when I got out. It’s now 1374 and I got out at 1358. Maybe I should be in the market; but on the
other hand, this is a time when I’d rather play it very safe. It may come down to news this week. Thursday we have ADP employment, Weekly
jobless claims, and ISM nonmanufacturing.
On Friday there’s Nonfarm payrolls and the unemployment rate.
If the news is good, I
think by Friday the NTSM analysis will indicate a buy and I’ll jump back in. I am not the only one cautious. Here’s what Mark Hulbert wrote today:
MARK HULBERT (MarketWatch.com)
“Particularly disturbing is that the HSNSI (Hulbert sentiment index) is now
higher than where it stood on May 1, when the bull market that began in March
2009 hit what so far is its highest closing level. It’s five percentage points
higher, in fact, even though the Dow is more than 400 points lower today than
then...This means that the market’s May-June correction failed miserably to
achieve what corrections are supposed to do: rebuild the veritable wall of worry…it
is a worrisome sign that the market timing community has so eagerly jumped on
the bullish bandwagon.
MY INVESTED POSITION
I remain out of the market…
I reduced my stock holdings
to 30% (0% in stock in the 401k) at S&P 1358 after the SELL signal on 9 May
2012. (See the page “How to Use the NTSM System” – the link is on the right
side of this page). I cut my stock
position to 15% on 17 May in order to maintain a 10% gain in a
trading/longer-term position I had in the QQQ.
