NEW YORK (TheStreet) – “Stocks were advancing in midday action on Tuesday
following a Federal Reserve
official's call to launch an aggressive asset purchase program. …The light summer
volume rally also got a lift from bond-buying chatter in Europe and easing concerns
about the Chinese economy.” Full story
at…
The Fed Governors are not
all in agreement so the fact that one wants more stimulus is probably not new.
MARKET
Tuesday the S&P 500
finished UP about 1/2% to 1401. VIX was
up 0.2% to 15.99.
This has been a nice
rally. The S&P 500 is up about 10%
since the 1278 June low. That’s pretty
good considering most were calling for Armageddon not long ago. The recent highs are in the 1420 area. The high off the bear-market bottom is around
1560 so it is possible for the market to continue up past the 1420 area. That’s the question now – how much longer
will the rally last? Market internals may
give some clue.
I didn’t get back into the
market on 4 June because I felt the volume and market internals were marginally
positive and not strong enough to call a buy.
I got back in later to outperform the S&P 500 by ½-%. (Ho hum…it would have been an 8-10% outperformance
if I had called it better). The point I
want to make here is that since the internals weren’t as good as in prior
corrections, we may not see as much of a gain as we did in 2010-11 (31%) or
2011-12 (29%) before this market turns around.
NTSM
The
NTSM analysis was again BUY at the close on Tuesday.
MY INVESTED POSITION
Based on the BUY signal, 6
July, I moved back into the market on 9 July (after the weekend) at S&P 500
1352. I now have a 50% stock allocation
overall. For my age, that is what most
advisors recommend, however, I am normally much more aggressive. I am underweight my usual aggressive
allocation for stocks because there’s a lot of risk now. So far this year NTSM is beating the S&P
500 by a whopping ½% on one trade.
