Thursday, July 11, 2013

Tired Bull Market

Stock market outlook: The bull looks tired

…Experts blame the cool down in the rally on subpar economic growth, slowing corporate profit growth, and uncertainty over the Federal Reserve's monetary policy.

"I think we're at an inflection point for the market," said Kim Forrest, senior equity analyst at Fort Pitt Capital. "The U.S. economy is just limping along -- the improvements aren't quick or meaningful enough."
Story at…

30-pros polled for the article guessed a year end finish of up 14%, below the all-time highs.  The market is currently up 16%.

“Barclays said Wednesday that it cut its second-quarter GDP trading estimate to 1.0% from 1.6% after the trade deficit widened in May.” Summary at…

1% GDP growth is well below the supposed 2% stall-speed for the economy, but the economy has been limping along below 2% before, so that’s one old theory that has been proven false (so far) this time around.  If there is a recession coming, it is probably a long way off.  The market is certainly not expecting a recession, but there are domestic concerns: Oil over $100 per barrel, acts as a drag on the economy.

Wednesday, the S&P 500 was unchanged at 1663 (rounded).
VIX was down about 1% to 14.21.          

Wednesday, the overall NTSM analysis is HOLD at the close. 

I commented yesterday that I was considering getting back in the market in a more meaningful way. 

Today…“Patience, young grasshopper…a better re-entry point is likely further down the road. Grasshopper, seek first to know your own journeys beginning and end. Seek then the other journeys of which you are a close part. But in this seeking, know patience. Wear that traveler’s cloak, which shelters and permits you to endure.” – Master Po

OFF TOPIC – Political Rant
“…a majority of U.S. registered voters consider Edward Snowden a whistle-blower, not a traitor…”  Commentary at Zero Hedge at…

As a youngster in the 1950’s, whenever I walked on the beaches of Hatteras, North Carolina, I got tar on my feet.  The tar was left from all the US ships sunk in World War II by German submarines.  WW II was about security and civilians understood its importance: “Loose lips sink ships.”  Had we leaked the ability to break Japanese codes, the War would have lasted much longer.  In recent years, leaking the ability to track overseas cellphone conversations delayed the capture of Bin Laden (and many other terrorists) and probably cost lives. 

The current surveillance of email and phone traffic sources and recipients (not conversations) may be troubling to some, but it seems like a reasonable system given the choices.  The current monitoring could have been challenged in secret through the Courts with the ACLU footing the bill, but Snowden foolishly chose to go to the foreign press.  He is a traitor. 

I remain about 20% invested in stocks as of 5 March (S&P 500 -1540).  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.