Reuters – New York
state manufacturing shrinks...
“Factory activity in New York state contracted for a second
month in a row in September, falling to its lowest level in nearly 3-1/2 years
as new orders shrank further, a report from the New York Federal Reserve showed
on Monday... The survey of manufacturing
plants in the state is one of the earliest monthly guideposts to U.S. factory
conditions. The sector contracted in August for the first time in 10
months.” Full story at...http://in.reuters.com/article/2012/09/17/usa-economy-nyfed-idINL1E8KH4FH20120917
EXCERPT FROM WEEKLY MARKET
COMMENT (9/17/12), HUSSMAN FUNDS
“As of Friday, our
estimates of prospective return/risk for the S&P 500 have dropped to the
single lowest point we’ve observed in a century of data... Emphatically, we are
not saying that investors can look at the worst intermediate-term losses in
market history, and expect the next one to be worse... Despite the uniformity
of negative signals we presently observe, I can’t say with certainty that this
particular instance will produce negative market outcomes...In short, saying
that our estimates of prospective return/risk are negative does not indicate
that the market will or must plunge. Rather, it says that the average outcome has been
quite negative, and the likelihood
of extreme “tail events” is vastly enriched compared with more typical
conditions throughout history.” – John Hussman, PhD.For the complete Weekly Market Comment see...http://www.hussmanfunds.com/
It doesn’t look like John
Hussman’s analysis could get much worse.
MARKET
RECAP
Tuesday the S&P 500
finished down 0.13% to 1459 (rounded).
VIX fell 2.8% to 14.18.
With the above negatives
from the NY Fed and John Hussman’s analysis you’d think the market would be
signaling recession too, but that isn’t the case. The Morgan Stanley Cyclical index has been
gaining ground on the S&P 500 (climbing at a faster rate). That stalled a little today, so we’ll have to
see which way the trend moves in the future.
(If the market believed recession was coming, the cyclical stocks would fall
relative to the S&P 500.)
NTSM
The
NTSM analysis remained BUY Tuesday and the Price, Volume, and VIX indicators
are all positive. Sentiment is neutral.You’d think I could move ALL-IN based on the NTSM analysis, but I have been watching market internals to get a shorter term view. I am still not convinced that the market will continue up. The percentage of stocks making new-highs keeps falling and I don’t think that should happen in a healthy bull market.
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 currently have a 50%
stock allocation overall. For my age,
that is what most advisors recommend as a fully invested position, however, I
am normally much more aggressive. I have
less invested in stocks now because there’s a lot of risk.
