“The Empire State manufacturing survey fell into negative territory in May for the first time since January, the New York Fed said Wednesday…
…Separately, the Federal Reserve reported industrial production dropped 0.5% in April…More disconcerting, manufacturing output fell 0.4%, the second monthly drop in a row. Fewer cars and light trucks were produced, reflecting the downturn in sales, and business equipment production as well as construction output also fell.
Capacity utilization fell to 77.8% from a downwardly revised 78.3% in March.” Story at…
http://www.marketwatch.com/story/empire-state-index-turns-south-in-may-2013-05-15
PUT THE HANDCUFFS ON – DON’T HIT THE SELL BUTTON - YOU
HAVE TO BE IN THIS MARKET (CNBC)
“As long as the inflation indicators are down, the Fed is
sitting back with a bourbon in one hand and a cigar in the other…fat dumb and
happy”. - Michael Novogratz, Fortress principal & director, explaining why
he agrees with David Tepper's bullish call (see yesterday’s blog) on the market
and why the rally will end when the Fed's tapering [cutting back on QE] begins. Story and video at CNBC at…http://www.cnbc.com/id/100738361
OK…even I am thinking about putting some more money back
into the market, but I haven’t cracked yet.
EXTREME BULLISHNESS
Once again we see that over 80% of all stocks on the NYSE
are trading above their 200-day moving average (200-dMA). That was true back in January thru
mid-February too. This is an overly
bullish indicator. If it begins to track
down, it is a negative for the markets.
Sentiment reached an extreme bullish level of 64%-bulls
as of Tuesday’s close based on the Guggenheim/Rydex funds I track. That level has been associated with market
corrections over the past several years, but by itself, it is not a good
indicator because it indicates a general problem, but rarely gives a timely
signal at the top.
The S&P 500 has been up 16 days in the last month and
9 out of the last 10-days. Those are
more extreme bullish indicators that sometimes indicate a top, but not always.
MARKET RECAP
Wednesday, the S&P 500 was up 0.5% to 1,659 (rounded).
VIX rose 0.3% to 12.81. Again…it is unusual for VIX to be up on an
up-day for the S&P 500. Wednesday, the S&P 500 was up 0.5% to 1,659 (rounded).
I suspect every trader who is short has been flushed down the drain. If tomorrow is up, I’ll eat my hat – I may have to find one that is tasty!
NTSM
Wednesday, the overall NTSM analysis was SELL at the close based on the
“Extreme Bullishness” paragraph above.
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%!)
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.
