Mr. Short says in his 15
August newsletter that the Big Four indicators are not rolling over as was
reported by the Economic Cycle Research Institute's (ECRI) Lakshman Achuthan in July.
John Hussman is a follower of ECRI; Lakshman Achuthan and ECRI have
been calling for recession. Mr. Short says
that the indicators do not show that recession is on the horizon. Mr. Short goes into a lot more detail in his
discussion.
Of course John Hussman,
PhD, has numerous charts and graphs that show we are already below recession
levels in important economic catogories.
In
the end the only thing I can conclude is that this “recovery” is so slow that
the experts can’t agree whether we are headed into recession or not. That is the best argument for following the
market and not the economy.
NTSM analysis follows the
market. In fact most investors don’t
think a recession is coming (as I noted in Friday’s blog) based on the relative
strength of the Morgan Stanley Cyclical Index when compared to the S&P 500
as of last Friday. (See the RECESSION
INDICATOR paragraph in this past Fridays Blog.)
MARKET
RECAP
Monday the S&P 500
finished unchanged at to 1418 (rounded).
VIX rose over 4% to 14.02.
NTSM
The
NTSM analysis remained BUY at the close on Monday. (The NTSM analysis is designed to call a BUY or SELL at the bottom or top respectively. For that reason a BUY at this point is less significant than it would be at a bottom. For that reason, the daily Buy/Sell/or Hold calls give the general market health and should not be used for trading, except when there is a switch from the previous Buy or Sell call.)
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 have less invested in stocks now because
there’s a lot of risk. 
