“It's been a dazzling week for mutual funds and ETFs…$22.2 billion flowed into equity funds this week, marking the second-largest weekly inflow in history…‘A new year, memories of 2012 returns, zero rates, the “fiscal whiff’...whatever the reason investors capitulated into equities this week," writes BofA strategist Michael Hartnett.’” Full story at…
http://www.businessinsider.com/historic-equity-fund-inflows-this-week-10-2013-1#ixzz2HidVuERi
Ok. I’ll accept
the above story since they no doubt have better access to information than
I. The most recent information available
from ICI (Investment Company Institute) states there were -8.3-billion in
outflows in the week ending 2 Jan. ICI
reports only mutual fund inflows and the above story is probably more up to
date and includes ETF inflows. I’ve also
heard reference to inflows from the “sidelines” on CNBC, so perhaps the big
push higher is getting started.
MARKET RECAP
Friday the
S&P 500 finished unchanged at 1472 (rounded). VIX was DOWN another 1% to 13.39.
NTSM
The NTSM analysis
remains BUY, based on Price and Volume indicators.
VIX is neutral,
but it is close to a buy too. Sentiment
has fallen to neutral territory.
The S&P 500
closed above the previous high of 1467 for 2-consecutive days. In addition, market internals, action in
cyclical stocks, and late day buying all look good.
The inflows noted in the Business Insider story are
obviously good for the markets, and should carry us to the old highs of around,
1560.
I plan to get
back in the market at about 60 to 75%-invested in the stock market.
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 negativity I have
noted from Hussman and others, I am currently invested in a range of near 15%
invested in stocks.
It seems that all
of the fear has vanished and it is time to buy back into the market. The S&P 500 is currently overbought and near
the top of the channel. It could drop a
few % before resuming an upward trend. I
suppose a smart move would be to wait for a better entry point, but it’s always
hard to know exactly when to make a move since short term timing is not my
strength. If investors are piling in, as
stated in the Business Insider article, it could stay overbought for a while
and waiting would be a mistake. So in
the end, Monday is probably as good day as any.
