Tuesday
I said I leaned toward the negative, implying that the good up day was simply a
bounce in the bear. Well we got the
answer a lot sooner than anyone (except the shorts) wanted to see. VIX was up 17% today. There’s nothing good about that.
Our
VIX indicator switched negative today and it joins the Volume indicator (a
variant of on-balance-volume) that has been negative for quite some time.
We’re
less than 1% above the 200-day moving average at this point. The previous closing low of Part 2 in our, apparently
continuing, correction was 1257 and that’s now right on the 200-dMA. We’ll watch the volume there to see if we
have a low volume day that might indicate an end (at least for a while) of this
downturn. If we don’t stop there, we
could easily fall another 6% and we might see some panic selling that could
send things a lot lower.
The
only news we’ve had recently is Bad. We
won’t see new earnings numbers for 3-months so its employment that folks are
watching, along with Greece and the farce in our own Congress. There is a big fear that a Greece default
will put huge pressure on banks in Europe and then you begin to wonder how much
exposure the US Banks have to that mess.
In short – I am not optimistic in the near term. Emotion is usually bad for decision making
though, and that is why I rely on the numbers we follow. Wednesday, the numbers got worse.
The
Navigate the Stock Market analysis switched back to SELL today. 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.
I
am defensively positioned with only 30% invested in stocks.
