Several friends have suggested that the recent choppiness in the market (I can’t call it a correction anymore since this has not transpired) is oil related. To that I respond, “It seems so, but perhaps not.”
The NTMS indicators peaked 14 Jan 2011 when the S&P was 1293 and fell from there. NTMS indicators deteriorated while oil was falling rapidly in early February and the S&P was still going up.
I conclude that while oil prices may have tipped us over the edge, the market was already showing significant issues relative to market behavior (sentiment, price, volume and VIX) a month earlier. That is why I am not sanguine that a resolution of the “crisis” will create a sustained upswing in the market. If the crisis is resolved, we could see a rally, followed by more a correction (or maybe even THE TOP), in relative short order. Anyway, this is all conjecture – what I think; not what I see – so as always we’ll wait to see how this resolves itself. What I see follows in our weekly summary of the NTMS indicators.
The Navigate the Stock Market analysis (NTSM) called a SELL on the S&P 500 on 22 February 2011. That was the first change since the 2 July 2010 buy-signal.
Since then we have bounced between a HOLD and SELL. Today we had another HOLD signal.
SUMMARY OF NTSM INDICATORS:
As of today’s close, our 4-areas of market analysis present the following picture:
SENTIMENT: Neutral. %-bulls indicator is now 50%. This is a middle of the road value for sentiment. (Sentiment is a reverse indicator; a high %-bulls indicator is bearish for the market and vice versa.)
PRICE: Neutral. Price analysis showed significant improvement since its low a week ago.
VOLUME: Neutral. More volume has been going to the upside, but not by much. This indicator improved to neutral yesterday.
VIX: Neutral. Our VIX indicator is in neutral territory. It is only slightly better than last week, but it now looks like it is in an uptrend and that is not good for the market.
The overall status for the Navigate the Stock Market system is HOLD.
I think a down-trend has started and we’ll need a good move up soon to break out of that trend. We should find out if I am correct soon - this prolonged foundering (like a shipwreck – not the fish) won’t last much longer.
No change in my invested position.
