Last Monday John Hussman, PhD, repeated his state-of-the-market comment that “…the market environment is characterized by a syndrome of elevated valuations, overextended price trends, overbullish investor sentiment, and rising interest rates. This combination of conditions typically does not persist for more than a few months, but when the complete set has been observed, the stock market has often been vulnerable to abrupt losses that can erase weeks or months of gains in a few trading sessions.”---- February 21, 2011, The Hussman Funds Letter to Shareholders by John P Hussman, Ph.D. (used with permission of Hussman Funds - http://www.hussmanfunds.com)
Mr. Hussman has mentioned before that his firm doesn’t try to predict the exact time that these “abrupt losses” begin.
They don’t; but we do. Our computer analysis issued a SELL signal this past Tuesday. We had some clues before Tuesday though. The volume (number of shares traded in the S&P 500) started falling at the end of January. This is an indication that there were problems with the health of the market a good 2-weeks before the oil crisis tipped us over the edge.
There is no change in the Navigate the Stock Market analysis…it is still calling a SELL.
