We
got a bounce today. Frankly, I expected the first bounce to be higher. Past history shows we could go up for a
couple of days from here.
I
think we will turn down again to test the 1257 level or perhaps we’ll make it
back to the 200-day moving average that, as of today, is 1251. We are currently 2.9% above the 200-day
moving average. This correction and
sideways action has really improved that stat.
One
of the CNBC guys said that the S&P won’t get to the 200-day because
everyone is watching that level and some will inevitably buy early. Perhaps, but sooner or later the selling
pressure has to dry up and the volumes will drop. We should be able to look at the internals at
the low and tell if we’ve bottomed. The other possibility is that selling pressure picks up and we break these lower support levels.
All
of my indicators in the Navigate the Stock Market system are neutral today so nothing looks scary right now. The Breadth of the S&P 500 has been
falling since November as fewer and fewer stocks have been advancing (even as
the S&P went up). That’s not a good
sign, but I haven’t studied the indicator enough to say when too much is too
much.
NTSM
analysis switched to SELL on Friday, 3 June; it was HOLD today. (See the page “How to Use the NTSM System”). I remain defensively positioned with only 30% invested in stocks.
