I have a dilemma at this point regarding whether to get back in the market tomorrow or wait awhile longer.
Reasons for going in:
1. The 401k plan I am in allows only 3-changes per month and the last change must be all-out. So if I were to go in, say on the 4th of April and the market turns down again and I pull out, I’d have to wait till May to get back in. That makes a strategic move tomorrow beneficial. By buying tomorrow I get another move in April.
2. The NTSM system is almost a BUY.
3. As I have noted on one of the supporting pages, NTSM system can be late with a BUY call when the correction is shallow and quick – exactly where we may be now.
4. One of my arcane statistical computations says the correction was over 1-1/2 weeks ago. (It’s such a weird statistical measure that it makes no sense to me at this point which is why I don’t even have it in the NTMS system yet as a buy indicator.)
5. Sentiment was not overly bullish at the market high and that, perhaps, would have made a short and shallow correction.
Reasons for Standing Pat (defensively positioned with only 30% in stocks)
1. Volumes were unusually low in the 2-weeks before the recent high of 1343 on 18 Feb. Usually in the run up to a high, volumes increase as more people rush to catch the train that they fear will leave them behind. Volumes didn’t increase as the market fell either (and people panic out). So this downturn is odd, and it may not be over.
2. The S&P 500 is still 11.3% above the 200-day moving average. We started this correction (or whatever it is) when that stat was 15% above the 200-day moving average on the 18th of February. So again, the correction (or whatever it is) may not have played itself out. The correction a year ago started when the S&P was 12.5% above the S&P 500.
SUMMARY OF NTSM INDICATORS:
As of today’s close, our 4-areas of market analysis present the following picture:
SENTIMENT: Neutral. %-bulls indicator is 49% as of yesterday – a middle of the road value. (Sentiment is a reverse indicator; a high %-bulls indicator is bearish for the market and vice versa.)
PRICE: Neutral. The Price analysis indicator improved since last week but it is still in neutral territory.
VOLUME: Buy. More volume has been going to the upside, and this indicator is the first to switch into the “Buy” camp.
VIX: Neutral. Our VIX indicator is Hold. Just 8-days ago the VIX indicator was Sell. Now it is in positive territory, but not enough to call a Buy. A strong up day (say 2%) would probably swing the VIX to Buy and carry the NTMS analysis to an overall Buy rating so we are not far from Buy at this point.
SUMMARY: The overall Navigate the Stock Market analysis is NEUTRAL today, and that makes 8-days with HOLD as our overall outcome. (See the page How to Use the NTSM System).
Since writing all this down still hasn’t helped me make a decision, I think I’ll follow some very old advice…when in doubt, stay the heck out. If the market keeps moving up I’ll buy some 2xLong funds in the trading portfolio.
