I ran in to an Architect Friend of mine who has his own firm. He said business is terrible – no one is building any new buildings. He does work to for other firms too. He said getting them to pay up is a big problem. In short, if the economy is getting better, you wouldn’t know it from his experience.
The VIX rose another 7% Thursday. We can’t be happy about that; it likely portends worsening market action ahead. On the other hand, it is options expiration tomorrow and that sometimes skews results; and then too, VIX does not predict which way the market will go; just how much movement is expected. On the whole though, rising VIX generally corresponds to falling Stock market.
As of Thursday’s close, the Sentiment indicator (based on the %-bulls of selected RYDEX long and short funds) was 47%. That has come down some, but it is a long way from being a buy, or a sell for that matter.
Volume and VIX are both signaling sell now, so even if we test the previous low on low volume and improving market internals (one way to call a bottom), it would be a tough call to buy on the successful test. I can’t call a bottom if the NTSM system is going to signal a sell the next day.
Price action has been getting worse as down-moves have been greater than up-moves recently and that indicator is close to turning negative too.
The NTSM model gave its first Sell signal of this cycle on Friday, 3 June at S&P 500 1300. It has been either Hold or Sell since then. It was SELL again today, Thursday. (See the page “How to Use the NTSM System”).
I am defensively positioned with only 30% invested in stocks.
