Mark Lehmann, president of JMP Securities: “…things seem darker than they really are…”
“This morning's first read
on Gross Domestic Product for Q3 came in at 2%, and University of Michigan
Consumer Sentiment index for October was in at 82.6; a five-year high.”
“Away from government data
and surveys, which is to say "in the real world," markets are on the
slide and corporate earnings relative to expectations are a disaster.”
“….Lehman says to stick
with stocks and stay domestic. 2013 and beyond are going to be much better than
expected, as he sees it, carried by "big macro tailwinds." An
obsession with the fiscal cliff and a tight election — and all the uncertainty
created by both — is making things seem darker than they really are, at least
as Lehman sees it.” Video interview at…
http://finance.yahoo.com/blogs/breakout/good-economic-data-meets-bad-earnings-one-wrong-162608879.html
My comment: Maybe…People
buy stocks based on the expectation that earnings and dividends will grow. Falling earnings should mean falling stock
prices so the earnings picture is worrisome.
MARKET INTERNALS
The market internals
measures of Breadth (%-stocks advancing) and New-Highs vs. New-lows both continue to deteriorate on
a longer term basis, i.e., a look at measures of new-highs/lows over the last
2-months and breadth over generally the same time frame shows that the markets
are actually deteriorating slowly.
Fewer stocks are going up. This trend isn’t good since sooner or later,
the markets are likely to follow the underlying trend. Unfortunately, I haven’t been able to find a
good buy/sell signal using the market internals – it just represents the
general cautionary note I have made before: a correction still seems to be out
there, I just can’t say when. Or to
clarify, the NTSM analysis will give a sell signal if market conditions worsen;
I just can’t predict when (or if) that will happen.
MARKET
RECAP
Friday the S&P 500 fell
a point to 1412 (rounded) and VIX fell about 1-3/4% to 17.81.
NTSM
The
NTSM analysis remained HOLD Friday.
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 many 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.
