It seems like it was only yesterday (actually it was 20 days ago) that Citi boldly went where every single other sellside analyst has gone before, and initiated...AAPL, with a Buy and a $675 price target...much has changed in three weeks apparently, because (Citi) just slashed AAPL's price target from $675 to $575, and cut its outlook on the name from Buy to Neutral, once again confirming what everyone knows: sellside research is the most hopelessly useless goalseeking, backward looking product created by Wall Street's brilliant minds whose only prerogative is how to bleed their clients dry. Commentary at...
http://www.zerohedge.com/news/2012-12-16/citis-apple-coverage-tag-trio-downgrades-aapl-neutral-price-target-cut-100-575
Right now I feel like the
Wall Street analysts referenced in the ZeroHedge article above. Even more than being on the wrong side of a
trade from the money aspect – I hate being wrong!
MARKET RECAP
Tuesday
the S&P 500 was UP another 1.2% to 1447 (rounded). VIX was down almost 5% to 15.57.
Today was the 3rd
statistically significant day in the past 4-days consisting of a down-day
followed by 1 non-significant day followed by 2-up days that were
significant. That last happened last
August 24th (see Monday’s blog for a discussion of statistically
significant days). That turned out to be
3-weeks before the 1466 top. That
situation could repeat again since there are several of my indicators that seem
quite stretched, even though overall the NTSM system is signaling BUY.
NTSM
Tuesday the NTSM analysis switched to BUY
based on the trend following indicators of Price and Volume.
With 2-statistically significant days up in a
row (and the S&P 500 chart looking parabolic (if only for a couple of days)
I am going to sit out another day or two just to be sure this isn’t a fake-out,
market-manipulation move. (Well, I can never be "sure" so perhaps I should say, I'll wait for a little more information and hopefully, gain some confidence.)
Longer term trends for Market Internals still
don’t look great, but they are not horrible either. More recently, internals have been great, as
would be expected on days with extreme positive moves. As I noted in posting about the top on the MS
Cyclical Index chart yesterday, the spread has topped anywhere from 6-weeks to
2-months early in the past so we could go up a while further. Sentiment is getting toppy at 60%-bulls as of
Monday’s close so, here again, this looks negative and it could top in a few
weeks, or less.
So the bottom line is; I’ll probably get back
in in the next day or two unless the market takes a sharp turn for the worse or
(if on the other hand) it continues screaming up. Screaming up could be a blow-off top,
especially if sentiment continues up at the rate it has recently. Ah well, this is not an exact science by any
means and it has been very un-exact over the past month or two.
As noted recently by ZeroHedge: “Bullish or bearish, it seems the velocity and scale
of the runaway moves after every utterance from D.C. has wrong-footed many
across every asset class.” The author
went on to suggest that the market action was much like the Debt Ceiling
negotiations that turned out to be a buy-the-rumor sell-the-news story last
year. That is very likely here. A Fiscal Cliff deal is likely to bring-on
selling – even if it’s only profit taking.
See ZeroHedge at…
http://www.zerohedge.com/news/2012-12-18/deja-vu-all-over-again
MY INVESTED POSITION
Based on the SELL signal, 7 November 2012, I
moved out of the stock market at 1377 on the S&P 500. Because of the extreme negativity I have
noted from Hussman and others, I am currently invested in a range of near 15%
invested in stocks and I am still holding short positions; but I plan to move
back into the market in the next day or two, after Wednesday. I’ll cover shorts Wednesday.
