Regular readers know that
John Hussman, PhD has been calling for recession and a significant stock
decline for some time. Here are some
excerpts from this week’s commentary from Hussman funds.
JOHN HUSSMAN, PhD
“Overall, we continue to
estimate a steeply negative return/risk for stocks on horizons from 2-weeks to
18 months. I recognize that this is easy to treat as disposable news, given
that the ensemble methods we developed to capture both post-war and
Depression-era data have indicated a negative return/risk profile for stocks
since April 2010, yet the S&P 500 is 18% higher today than it was at that
time. Central bank interventions have certainly played a role in that gain. But
then, our prospective return/risk estimates have been in the lowest 1% of
historical data only since March... ...stocks have typically surrendered closer to 80% of their preceding bull market gains when the cyclical bear is part of a “secular” bear period such as the one we’ve experienced since 2000...these estimates are largely independent of our conviction that the U.S. economy has already entered a recession.” – 1 October 2012 Weekly Market Comment, John Hussman, PhD. Full commentary at... http://www.hussmanfunds.com/
John Hussman does a
rigorous analysis of data and I think he is right; but as always when trying predict
the stock market, it’s the timing that’s hard to call.
MARKET
RECAP
Tuesday the S&P 500
finished UP 0.1% to 1446 (rounded). VIX fell
about 4% to 15.71.
The market was up today in
the last hour of trading today, finally and that may be good news for the short
term.
NTSM
The
NTSM analysis remained HOLD 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 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.
