"…Since the 1900s, December is the best month for the Dow, and second-best month for the S&P 500 and Nasdaq. Historically, all three indexes have gained on average between 1 and 2 percent, respectively…The trend holds in recent times as well. In the past 20 years, the S&P finished positive in December 80 percent of the time,” Full story at…
http://www.cnbc.com/id/101235707
December the best month – I don’t think that will be repeated this year.
MARKET REPORT
Friday, the S&P was up about 0.3% all day, but tanked in the last hour of trading to finish down 0.1% (1pt) to 1806 (rounded) on holiday volume (30% below the norm for the month).
VIX was up 6%
to 13.70, all in the final hour. Friday, the S&P was up about 0.3% all day, but tanked in the last hour of trading to finish down 0.1% (1pt) to 1806 (rounded) on holiday volume (30% below the norm for the month).
CORRECTION THOUGHTS
Last hour trading (when
the pros trade) has fallen off a cliff starting 21 November, but that could be
just an effect of the Holiday. It could
also predict another top. The S&P
500 is now 9.4% above its 200-dMA and it was 9.8% about 2-weeks ago. Those levels suggest a correction. The index is at its upper trend line
too.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing fell to 52%
at the close Friday. (A number above 50%
for the 10-day average is generally good news for the market.)
New-highs outpaced new-lows Friday, leaving the spread
(new-hi minus new-low) at +194 (it was +154 Wednesday). The 10-day moving average of change in the
spread was minus 3. In other words over
the last 10-days, on average, the spread has decreased by 3 each day.
This trend following indicator is neutral on the market
in the short term.
Market Internals are a decent trend-following analysis of
current market action, but in 2013 (so far), if I had been buying the positive
ratings and selling negative ratings I would have under-performed a
buy-and-hold strategy.
NTSM ANALYSIS
Sentiment is EXTREME
negative at 74%-bulls for the 5-day indicator.
(Three out of four investors in Rydex/Guggenheim funds I track are
betting long.) Overall, NTSM is neutral.
(I am mostly out of the market already.)
MY INVESTED POSITION (NO CHANGE)
I remain about 20% invested in stocks as of 5 March
(S&P 500 -1540). 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 now under-performing my own system by about 6%!) 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.
I still lean toward getting back in, after a pullback, to
speculate on a final ride to the top.
NTSM did give several buy signals over the weeks of 14 and 21 Oct, but
the market just looks too frothy to rush back in…we’ll see if the market will
pullback so I can join the insanity. If
not, cash is fine.
