“MY-COUSIN-VINNY” MARKET, BULLISH TEPPER SAYS (CNBC)
“[David] Tepper, whose Appaloosa [hedge fund] delivered
an after-fee annual return of 30 percent in 2012, joking (sic) compared the
reason for being in stocks to the ending of the movie "My Cousin
Vinny"—saying the evidence is overwhelming. The fund manager said that "the economy is
getting better, autos are better, housing's better it continues to improve,
they can't find enough people to work in housing, that's the only thing holding
it back right now." Story and Video
at…http://www.cnbc.com/id/100734343
FED PREPPING THE MARKETS FOR END OF QE? (CNBC, Monday)
“If an article in Monday's Wall Street Journal is
anything to go by, the U.S. Federal Reserve is getting ready to unwind its
massive monetary stimulus program. And that prospect is unlikely to be as
alarming for financial markets as feared, analysts tell CNBC…Fed officials have
mapped out a strategy to wind down its $85 billion-a-month bond-buying program
in careful steps, although the timing of when that will start is still being
debated, noted Fed watcher Jon Hilsenrath wrote in the WSJ.” Story at…http://www.cnbc.com/id/100730473
CRAMER: “I’VE NEVER SEEN THIS IN 34 YEARS OF INVESTING
(CNBC)
[The story cited 3-main points with specific stock examples
and analysis.]“1. No Sell Off On Good News
2. No Trade Down To Fill Upside Gaps
3. Stocks Roar Higher After Miss
…’I believe that we are in a surrealist moment where even hardcore optimists are blown away by this bullish stampede," Cramer said. "Right now we have a bull that's crushing even the most skilled of matadors. We old timers have always been taught not to chase. We have learned that you will always get your chance. That may not be the case this time around.’" Story at…
http://www.cnbc.com/id/100732916
Hmmmm. They said
the same sorts of things near the top in 2001 – “this time is different”; “a
new paradigm”; “we have tamed the business cycle”. That doesn’t mean that the bull should be
ignored. It could continue longer, but
not much before we have a correction. I
disagree with the opinion of some (including David Tepper in his interview
linked above) that the markets will be unfazed by an end to QE. The end of QE may trigger a real debacle, but
most suggest it will be next year before the Fed acts.
EUROPE RECESSION CONTINUES
“Gross domestic product in the 17-nation economy fell 0.1
percent in the first three months of 2013, a sixth straight quarterly decline,
according to the median of 39 economists’ forecasts in a Bloomberg News survey.
That would exceed the 15-month contraction in 2008-2009 during the financial
crisis, and is the longest streak since the euro’s founding in 1999. “We are at a very critical stage at the moment and there are indicators that uncertainty is on the rise again,” said Joerg Kraemer, chief economist at Commerzbank AG in Frankfurt. “It is essential for the euro area to find the right mix between necessary austerity and measures to support economic growth as soon as possible.” Story at…
http://www.bloomberg.com/news/2013-05-12/euro-recession-seen-persisting-to-longest-in-bloc-s-era.html
I’d be amazed if the US can avoid recession with Europe
in recession and China in decline...BUT…As
long as the US Cyclical stocks continue advancing (and they did today), we
don’t have to worry about recession.
MARKET RECAP
Tuesday, the S&P 500 was up 1% to 1,650 (rounded).
VIX rose 1.7% to 12.76. Now that is unusual! Normally, you’d expect the VIX to fall on a
big move up. It would appear that the
options crowd is not so sure about the rally at these levels. Tuesday, the S&P 500 was up 1% to 1,650 (rounded).
I expect some downtime for the market. The S&P 500 closed 12% over its
200-dMA. Today was a statistically
significant move up and those are usually followed by a down-day. The S&P 500 is at the top of its upper
channel – there’s room to fall. VIX was up on a big up-day. EVERYONE is now bullish, so I think the Wall
Streeters will take some profits.
NTSM
Tuesday, the overall NTSM analysis was again HOLD at the close. NTSM analysis needs some stronger signals from the market. Otherwise it will be HOLD forever.
MY INVESTED POSITION
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.)
http://navigatethestockmarket.blogspot.com/2013/03/why-i-got-mostly-out-of-stock-market.html
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%!)http://navigatethestockmarket.blogspot.com/2013/03/why-i-got-mostly-out-of-stock-market.html
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.
