Several of our indicators got worse today. The Navigate the Stock Market (NTSM) system is designed to show when there is a breakdown in the market that is not visible by just examining which way the market is going. For example, even though the S&P was up almost 1% today, some of our key indicators got worse.
If this trend continues the NTSM computer analysis will call a SELL.
We’re due for a correction and this may be all that we get. My concern is that if you view the above TAB, “Compare the 1966 Bear Market to the Current Bear Market,” you see numerous significant drops during past bear markets. One problem that could concern the market is the price of gasoline.
If the market gets the impression that gas prices are going higher than $4, we could be in for trouble. In simple terms, high gas-prices may send us into a double dip recession, or at least cause some serious problems for the stock market.
The recession officially started in December 2007, 9-months before the stock market peaked. Gas prices were about $3 per gallon at the time, about the same as now.
My guess is that we will go higher for a while longer, but as always, we’ll have to wait and see.
Bottom line…I am ready to sell if I get a signal.
Meade
Gasoline Price data is available at GasBuddy.com:
