MARGIN DEBT OVER 2.25% GDP – STOCK MARKET ALWAYS CRASHES
(Investment Watch)
“What do 1929, 2000 and 2007 all have in common? Those
were all years in which we saw a dramatic spike in margin debthttp://investmentwatchblog.com/what-do-1929-2000-and-2007-all-have-in-common-whenever-margin-debt-goes-over-2-25-of-gdp-the-stock-market-always-crashes/
NEXT 18-MONTHS WILL REDEFINE ECONOMIC ORTHODOXY FOR THE
WEST (ZeroHedge)
“Simply put, Bass explains, we do not want to admit that
there is this serious (potentially perilous) outcome that disallows the world
to continue on the way it has. and that is why so many people, whether
self-preserving or self-dealing, miss all the warning signs and get this wrong…"I
would like to live in a world where it's all rainbows and unicorns and we can
make Krugman [Keynesian economist and columnist for the NY Times] the President
- but intellectually it's simply dishonest" - Kyle Bass. Summary and video at ZeroHedge
at…http://www.zerohedge.com/news/2013-06-18/kyle-bass-next-18-months-will-redefine-economic-orthodoxy-west
TAPERING TO START THIS YEAR - GUESSING (Bloomberg)
Obama said Bernanke has “already stayed a lot longer than
he wanted or he was supposed to” in an interview with Charlie Rose that was broadcast June 17 on PBS……“One of the implications of the fact that Ben is now very, very likely to be leaving at the beginning of the year is that he’s going to want to get the so-called exit strategy under way,” Feldstein said on CNBC television today. “He’s going to want to start the tapering before he leaves so that he can say,‘I did all these good things, and I put us on an exit path.’” - Martin Feldstein, Harvard University Economics Professor. Full story at…
http://www.bloomberg.com/news/2013-06-19/bernanke-exit-signaled-by-obama-means-tapering-feldstein-says.html
BERNANKE HINTS EASING END IS NEAR (CNBC)
“At a news conference, the central bank chief said if the
economy continues to improve the asset-purchasing program could start winding
down towards the end of 2013 and wrap up in 2014.” Story at…http://www.cnbc.com/id/100828661
MARKET RECAP
Wednesday, the S&P 500 was down about 1.4% to 1629 (rounded).
VIX was up about 0.2% to 16.64. Wednesday, the S&P 500 was down about 1.4% to 1629 (rounded).
What? S&P 500 was down over 1% and the
VIX was up only 0.2%; odd.
MARKET INTERNALS AND MORE ODDITIES
Even after Wednesday’s Fed debacle the
10-day moving average of percent bulls is slightly above 50% and that is
generally positive for the markets…at least in the short term. 176 stocks made new highs today while only 86
made new lows.
Bottom line…market internals are not yet
confirming a turn-around to the downside.
Neither is the VIX.
Today was statistically significant in price
and volume and that usually means a reversal tomorrow so we might see a
positive close Thursday. It really looks
like the market may go a little higher or, alternatively, the tea leaves may
all reverse soon.
The Fed news may trump the technical tea leaves so
we’ll just have to wait and see.
NTSM
Wednesday, the overall NTSM analysis was HOLD at the close.
SENTIMENT remains extreme: (The
broken record report.) The 5-day moving average was up again to 70%-bulls
(!!!!) in the Guggenheim/Rydex funds I track as of Tuesday’s close. A 5-dMA of 70%-bulls is almost unheard of
and this has been going on for 9 out of the last 15-trading days.
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.
