CONSUMER CONFIDNCE DECLINES (Bloomberg)
“The Thomson Reuters/University of Michigan preliminary index of consumer sentiment declined to
82.7 in June from 84.5 the prior month that was the highest since July 2007, a
report today showed… ‘The stock market peaked in late May, so you may be seeing
some of that being reflected in the number,’ said Michael Feroli, chief U.S. economist at
JPMorgan Chase & Co. in New York, who projected a drop in the
gauge to 82.5. ‘In general, the consumer is in a relatively good position.’” Story at…http://www.bloomberg.com/news/2013-06-14/michigan-consumer-sentiment-index-decreased-to-82-7-from-84-5.html
MARKET RECAP
Friday, the S&P 500 was down about 0.6% to 1627 (rounded).
VIX was up about 5% to 17.15.Friday, the S&P 500 was down about 0.6% to 1627 (rounded).
MARKET INTERNALS & SOME MARKET COMMENTS
ON FRIDAY’S ACTION
Interesting day! Market down, but…the 10-day
moving average of breadth (percent advancing) improved from 36%, 7-days ago, to
45% today.
New-high/new low data also reversed
significantly; 2-days ago the new-lows
outpaced new highs by 347. Today,
Friday, new highs outpaced new lows
by 21. That’s a big turnaround. My NTSM buy signal is actually a bigger reversal
than that, but not by too much.
Remember, the NTSM system is built for longer-term, bigger moves.
Volume was low, about 20% lower than the
average volume over the last month.
Although these numbers don’t seal-the-deal,
it may be that Friday was a higher-low, reversal-day. I’d like to see some more data; I’m not great
at calling bottoms based on higher-lows.
Based on this data, if I was short, I’d
cover Monday if it looks like the markets are moving up. On the other hand, some traders expect a
collapse next week, at least based on discussion board posts I’ve read. To me, it looks more like we go up. How far? Well, the S&P 500 is 8% above
its 200-dMA so it could easily go up a couple percent. Beyond that, I don’t know. World markets seem to be in trouble and the
US is still OK (at least to uninformed investors) so there may be foreign money
coming to the US stock markets supporting prices.
NTSM
Friday, the overall NTSM analysis was HOLD at the close.
SENTIMENT remains extreme: The
5-day moving average was 69%-bulls in the Guggenheim/Rydex funds I track as of Friday’s
close. That suggests topping in the
markets.
Longer term, nothing has changed, except that we may see a bounce next week.
No guarantees.
MY INVESTED POSITION
I remain about 20% invested in stocks as of 5 March (S&P 500
-1540). My reasoning may be found at…(although
that probably looks pretty lame by now.)http://navigatethestockmarket.blogspot.com/2013/03/why-i-got-mostly-out-of-stock-market.html
The NTSM system sold at 1575 on 16 April. (This is just another reminder that I should follow the NTSM analysis and not act emotionally – I am under-performing my own system by about 2%!)
I have no problems leaving 20% or 30% invested. If the market is cut in half (worst case) I’d
only lose 10%-15% of my investments. It
also hedges the bet if I am wrong since I will have some invested if the market
goes up. No system is perfect.
