Bottom line: The S&P 500 volume was high,
as expected, but there was no change to the NTSM analysis. (Had I used the extreme number it would have
switched a “panic-indicator” to sell (based on statistical analysis of
price-volume) and that could have changed future NTSM calls.
Sorry for all the boring details, but the daily analysis is quite rigorous.
At this point, staying out of the market may
yet turn out to be for the best.
I think the market had priced-in a deal on the
Cliff that doesn’t do much, i.e., no change to Medicare, small tax increase on
the rich and some mild spending cuts.
The Wall Street Journal reported today
(Saturday) that Congressman Ryan is holding out for changes to the Medicare
structure. (I agree with that course –
Medicare is in trouble because people are living longer and it is bleeding the
Treasury; to fix it, just raise the eligibility age.) Other Republicans are unwilling to vote for
any tax increase and most Democrats oppose changes to Medicare.
In a weird sort of political game, I have read
that some think the Republicans may be willing to vote for the President’s tax
proposal after taxes are raised by the Fiscal Cliff legislation already enacted
into law. The increase would (at that
point) be a decrease if that makes sense.
The WSJ said nothing about such possible motivations. It simply noted that many Republicans are
against ANY tax increase.
If Fiscal Cliff becomes reality, the CNBC fear
mongering will reach unprecedented levels and will push the S&P 500 down
for that correction the NTSM system predicted in early November.
No point in guessing now though. NTMS is in neutral territory waiting for more
direction – like all investors.
