S&P
500 was down 3.7% and VIX(S&P) rose over 30% today, Wednesday.
The
interest on Italy’s debt (as driven by 10-yr bond yields) rose above 7% today and
traders decided that Armageddon is here, again. I don’t know…the bond ghouls are driving the
train and you have to wonder whether the market is being manipulated. Could our enemies be trying to bring down the
west? Perhaps it’s just a result of the buy-your-vote
Politicians over-spending. Well, enough
paranoid musing...
Speaking
of mental illness, my writings have been schizophrenic recently. I agree with John Hussman that recession is
likely, but even so, I still remain bullish until proven otherwise.
The
Navigate the Stock Market analysis took a big hit today, but it did not issue a
sell.
a.
Sentiment
is neutral.
b.
Price
is neutral.
c.
Volume is neutral, but just barely. Volume was about average today so, in spite
of the big %-move down in price, this was not a typical panic. Perhaps it was just nerves; BUT, any more
significant selling and the associated down volume will push the NTSM analysis
to a sell.
d.
VIX(S&P),
our best indicator, switched to sell today.
Overall the NTSM system is HOLD.
I
commented last week that we could see a drop to 1225 on the S&P 500; I
certainly didn’t expect that to happen in one-day!
So
here we are. The S&P 500 fell to its
bottom trend line so it has not yet confirmed a break of the up-trend that has
been in play since 3-October. So yes, I
am still bullish, though cautiously so and further selling will crush that
tenuous optimism in a hurry.
I
remain fully invested, but I will watch the NTSM analysis and act
accordingly. NTSM is based on closing
data and I have gotten burned in the past when I acted on “projected” closing
data, so it is likely I’ll have to wait ‘till tomorrow evening depending on the
market action. If it looks like I can
make a call before the close, I’ll post during the day.
If
I do have to sell, I can do that fairly easily by going to 100% cash in the
401k. It’s one fund, so one-click will
get me to a 30% long position. I think
leaving 30% invested is OK, because if selling turns out to be a wrong call, I
still have 30% invested. If the market
get’s clobbered, a 30% position would only give me a 15% loss in the portfolio
if the market is cut in half.
