But not everyone is as sanguine as me. Here’s an excerpt from John Hussman’s (PhD) weekly comment at http://www.hussman.net/
“Despite the short-term oversold condition of the market, I should be clear that we are presently observing a combination of evidence that is typical of early bear markets - having some potential to be reversed, but with a generally dangerous record overall. This evidence includes the present combination of unfavorable valuations and unfavorable market action, developing concern from…our recession warning composite (which would be completed with a monthly S&P 500 close below about 1250 and another weak ISM report), a recent advance that has already passed the historical norms for extent and duration of cyclical bulls within secular bear…and the neutral intermediate-term, but hostile longer-term evidence we observed at the early May peak…. All of this presently holds us to a generally defensive investment stance.”
Regarding the possibility for Greek default, Mr. Hussman says later in his commentary that the possibility of Greek default is almost certain, but not yet.
Here’s what I think…
On 18 Feb the S&P 500 was 1343 which was 15% above the 200-day moving average. On 15 June the S&P was 1265 and 0.7% above the 20-d MA. There is a lot more room for upside now than there was 4-months ago.
One market internal that I track is breadth. As I measure it, breadth (number of advancing stocks vs. declining) looks good. Except for VIX (which is a sell today), all other indicators are neutral.
I agree with Mr. Hussman on an important point; if we drop to 1250 we are in trouble and will be looking for a Sell signal from the NTSM analysis.
NTMS is HOLD Today.
Since volume analysis called a Buy last week on the Successful test of the prior 1257 correction low, I upped my investment position to 50% invested in stocks overall. I’ll need to see some positive news before increasing the % invested in stocks any further.
