“As
of last week, the Market Climate for stocks remained unfavorable, reflecting
overvalued, overbought, overbullish conditions, rising yield pressures, an
exhaustion syndrome, and reduced but continuing economic concerns.
As
we extend the outlook horizon beyond several weeks…the risks we observe become
far more pointed. The most severe risk we measure is not the projected return
over any particular window such as 4 weeks or 6 months, but is instead the
likelihood of a particularly deep drawdown at some point within the coming
18-month period.” – John Hussman, PhD, Weekly Market Comment,
21 Feb 2012, Hussman Funds http://www.hussmanfunds.com/
Famous stock market quotes: “Difficult to see. Always in motion is
the future.” - Yoda
Here’s
an interesting chart pattern from the recent, and not so recent, past that may
give us clues to the future.
The
“W” pattern or double-bottom is a “good” pattern since it is a graphical
representation of a successful test of the previous low and portends a market
rise. I’d rather look at the numbers
than the chart pattern, because I want to buy at the low (as we did in 2010)
and not wait for the last leg of the “W” to form; but what the heck, the chart
boys are happy. Maybe we should be
too! Just another reason to think the
S&P 500 might get to 1550 and make that triple top Abigail Doolittle
mentioned last week (see 13 Feb 2012 blog below).
The
S&P was up 1pt today, almost unchanged.
VIX climbed 2.3%.
Today
the NTSM analysis fell to HOLD.
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).
Just
a reminder: 100% invested in stocks is way too much for most rational
folks. Don’t do it unless you have a
high tolerance for risk.
