MY CLIENTS ARE IN CASH (Jason Leach)
“I moved long positions to cash for clients two weeks ago (opting for non-directional options plays for the near term). Now, we are back at the same levels where I moved to cash. Was I being too cautious? I don't think so. I don't want clients to get caught up in what I believe may be the last bit of this "parabolic" move up from 2012/2013 Federal Reserve and Bank of Japan "money printing" and the possible violent downward "resolution". Full commentary with charts posted to dShort.com, Advisor perspectives, at…http://advisorperspectives.com/dshort/guest/Jason-Leach-140212-Red-House.php
John Hussman is not buying…
HUSSMAN COMMENTARY (Hussman Funds)
“…we estimate that stock prices are about double the level that would
generate historically adequate long-term returns.” – John Hussman, PhD. From
the Weekly Market Commentary from Hussman Funds for 10 Feb 2014 at…
http://www.hussmanfunds.com/
MARKET REPORT –
CORRECTION OVER?
Wednesday, the S&P 500 was down 1-half point to 1819 (rounded).
VIX was down about 1% to 14.30.
The 10-year Treasury Note yield rose to 2.76%. A rising
bond yield at this point indicates bond selling and that usually means
investors are buying stocks. The bond market continues to suggest “correction
over.”
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing climbed to 59%
at the close. (A number above 50% for
the 10-day average is generally good news for the market.) New-highs outpaced new-lows improved Wednesday,
leaving the spread (new-hi minus new-low) at +89. (It was +73 Tuesday). The 10-day moving
average of change in the spread was +15. In other words, over the last 10-days,
on average, the spread has increased by 15 each day. Up volume has broken out
of its downtrend and is sharply up.
All of the short term internals indicators are positive
and continue to suggest that the S&P 500 should get back to the prior high of 1848.
Perhaps the S&P 500 has once again
dodged the correction bullet, if only for a little while.
Market Internals are a decent trend-following analysis of
current market action, but should not be used alone for short term trading. They
are usually right, but they are often late.
They are most useful when they diverge from the Index. In 2013, using these internals alone would
have made a 16% return vs. 30% for the S&P 500 (in on Positive out on
Negative – no shorting). Of course, few
trend-following systems will do well in an extreme low-volatility, straight-up
year like 2013.
NTSM
The NTSM system remained HOLD today, Wednesday. The first Sell signal of this cycle was just
over 2-weeks ago on 24 January. Sentiment, Price, Volume and VIX indicators are
all neutral, but all NTSM (long-term) indicators improved today.
MY INVESTED POSITION
I am about 40% invested in stocks because I upped my
stock holdings by 10% on 12 February (S&P 500- ). This
is a conservative allocation, but putting a bit more into stocks recognizes
that the market internals are improving on the S&P 500 and the “correction”
may once again confound the bears. Can
you say March?
