Friday, October 18, 2013

All You Need to Know About Investing: Don’t Fight the FED

PERHAPS THIS IS ALL YOU NEED TO KNOW ABOUT INVESTING:
Don’t’ fight the FED.
Chart from dShort.com Advisor Perspectives at…
http://www.advisorperspectives.com/dshort/

MARKET REPORT
Friday, the S&P finished up 0.7% to 1745 (rounded) at the close.
VIX fell 3% to 13.04. 

MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing is 57%. (A number above 50% for the 10-day average is generally good news for the market.) 

New-highs outpaced new-lows Friday, leaving the spread (new-hi minus new-low) at +442 (it was +308 Thursday).  The 10-day moving average of change in the spread is plus 33.

Market Internals remain Positive on the market for this short term indicator.

NTSM
The overall long-term NTSM analysis is BUY again at the close Friday. 

I haven’t gone back into the market for the reasons I noted yesterday, Thursday.  Here are a few more reasons I’m waiting:  Volume was more than 25% above normal (monthly average) on the NYSE today.  Given the up day, I think it is a combination of short squeeze and possibly some panic buying.  The S&P 500 is near its upper trend line so there should be better buying opportunities ahead.  The S&P 500 still has not cleared the triple-top concern that I have. I want to see the index significantly above its old high.    Today it closed 1% over the old high.

MY INVESTED POSITION
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.