The
S&P 500 moved up to 1238, a 1.6% gain for the day, Wednesday.
I’ve
written on several occasions about the Shiller P/E-10.
From
the Motley Fool at http://www.fool.com/investing/general/2011/10/31/5-things-that-should-spook-investors.aspx
we get the following:
“The
P/E-10, a price-to-earnings ratio that uses average earnings over the prior
10-year period…(is)…flashing red right now: Based on Friday's closing price of
1,285.09, the S&P 500 index has a P/E10 equal to 21.6 By comparison with
the indicator's long-term average, that suggests stocks are roughly 30%
overvalued.”
So
we have that bit of bad-news analysis, the continuing European saga, and John
Hussman’s weekly comment (yesterday’s blog), to remind us things aren’t all
that great.
Today
we saw a slightly better than expected ADP employment report and we heard Bernanke’s
comment that we were getting past the slow patch in the economy, but we would
see a slow economy for years to come.
Hmmm…the good news seems pretty lame.
The
one thing in our favor is that the market assesses news and prices stocks
accordingly. The 3 October 1099-bottom (on
the S&P 500) still looks like a significant major bottom in this cycle of
the bear market.
I
commented about 2-weeks ago we could see and 5% pullback and that is about what
we had. That is typical 3 to 4-weeks
into a rally off a major bottom.
The
NTSM indicators of Sentiment, Price, Volume, and VIX are all hold.
Overall,
the NTSM analysis is HOLD today, Wednesday.
I bought back into the stock market at
S&P 500 1155 on 7 Oct after the 6 Oct NTSM buy signal. I remain 100% long in the long term portfolio
(100% stocks in the 401k.). (See the page “How to Use the NTSM System” – the
link is on the right side of this page).
I
am 50% long in the trading portfolio.
