Tuesday, May 21, 2013

Fed Week (Not Bike Week)

S&P 1800? (MarketWatch)
“Stay long equities, short commodities, says Deutsche Bank’s Chadha”…In a note published Tuesday, ‘We stay the course in our asset allocation which remains long equities, credit and the dollar; short duration, cash and commodities. We do not expect a sustained pullback in risk assets in the face of reasonable negative catalysts until positioning gets much more extended.”  Story at…

All eyes on the Fed...

This ride is courtesy of the FED.
“Bank of Japan’s Governor Haruhiko Kuroda will kick things off on Wednesday with a decision and press conference where no change and lots of market-soothing comments should be made….Wednesday also brings us US Fed Chair Ben Bernanke testifying before Congress…Later that day we get the minutes from the last US Fed meeting, which will be analyzed, interpreted, misinterpreted, and fretted about until the next time we get meeting minutes.”  Story at… http://www.minyanville.com/special-features/wall-of-worry/articles/The-Central-Banks-Speak-The-Markets/5/21/2013/id/49933#ixzz2TwVy8oVH

OIL AT $96 PER BARREL (MarketWatch)
“Motorist and leisure travel group AAA, however, said Monday that it expects motorists to face the highest Memorial Day retail gasoline prices since 2011. It blamed increasing prices on higher oil prices and tight supplies in many parts of the country caused by planned and unplanned refinery problems.

The average price for a gallon of regular gasoline stood at $3.65 on Tuesday, up from $3.58 a week ago, according to AAA’s Daily Fuel Gauge Report.  Story at…

Higher oil prices are just another drag on the economy.

Tuesday, the S&P 500 closed up 0.2% to 1669 (rounded). 
VIX was up about 3% to 13.37.

Tuesday, the overall NTSM analysis was HOLD at the close.

SENTIMENT was 66%-bulls at the close yesterday for the 5-dMA of Guggenheim/Rydex Funds I track.  It doesn’t get much more extreme than that. The   PRICE indicator is currently positive, because moves have been bigger to the upside than the downside. Other indicators are neutral.

I don’t think analysis means much now as the markets just power up.  CNBC noted that the Dow is up 19-Tuesday’s in a row and that has not happened since 1927.  So let’s do some analysis…1929-1927=2yrs…therefore; the markets will go up for the next 2-years.  Sorry, it’s a weak attempt at humor.
I remain about 20% invested in stocks as of 5 March (S&P 500 -1540).  My reasoning may be found at…(although that probably looks pretty lame by now.)
The NTSM system sold at 1575 on 16 April.  (This is just another reminder that I should follow the NTSM analysis and not act emotionally – I am under-performing my own system by about 2%!)

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.