Tuesday, April 16, 2013

If the Job Market is improving…

…why aren’t more people employed?
Click on chart to enlarge.

The above chart from the Federal Reserve shows that the actual percentage of the population employed is no higher than it was at its peak in the first quarter of 2010.  Any drop in the unemployment rate is smoke and mirrors, or more precisely, it is due to discouraged workers who quit looking for work and are no longer counted in the stats.

“The brutal meltdown of the price of gold on Friday and Monday triggered speculation that a major holder of gold had entered the market as a major seller. Perhaps someone—a bank trading desk, a hedge fund, even a central bank—caught on the wrong side of a trade was forced to sell a large amount of gold, pushing the price down.”  Story at...

Tuesday, the S&P 500 was up 1.4% to 1575 (rounded).

VIX fell 19% to 17.27 to give back half of yesterday’s rise.  If VIX drops all the way back to where it was in the next day or two…hmmmm.   I’ll have to think about that.

As expected, there was a bounce today (Tuesday); and, it was a “statistically significant” up-day.  That means the odds favor Wednesday being a down-day by about 62%.  We’ll see. 

The S&P 500 peaked at 10.2% above its 200dMA.  It is now 8.6 above its 200dMA.

The typical correction lasts around 2-1/2 to 3 months, if there is such a thing as typical.  At this point, a correction isn’t certain, even though the data so far makes it a reasonable probability…guessing now…say 66% that we will have a correction? 

Tuesday, the NTSM analysis was either HOLD or SELL.  I need to get the sentiment data and that will depend on what happened today at the close in the Guggenheim/Rydex funds I track.  Since that data isn’t published until late tonight, I am not going to worry about it.  It makes no difference anyway, although a series of SELL ratings is always more convincing than a one-day wonder. 

I remain about 20% invested in stocks as of 5 March (S&P 500 -1540).  My reasoning may be found at…
…but now I have confirmation from the NTSM analysis.  The NTSM analysis recommended sellling yesterday after the close, so its "official" sell point is today's close - 1575.  (As usual, my system is beating me!  @#$%^)

I have no problems leaving 20% or 30% invested.  If the market is cut in half (worst case) I’d only lose 10%-15% of my investments.  It also hedges the bet if I am wrong since I will have some invested if the market goes up.  No system is perfect.