YELLEN PROMISES MORE. EVIDENCE SUGGESTS LESS (STA Wealth Management
– Lance Roberts)
"If we analyze the impact of [all Government programs
since the Great Recession] … on the economy we find a much more disappointing
result. Chart below shows the growth of real GDP as compared to amount
supports, subsidies and bailouts injected into the system."
Chart from Lance Roberts at… http://stawealth.com/daily-x-change/1882-yellen-promises-more-evidence-suggests-less.html
“Despite Janet Yellen's commitment to continue supporting
the economic recovery the transmission system of government interventions is
clearly broken… it has taken $35.17 of government intervention to generate $1
of economic growth over the past 5 years. More importantly, the rate of
diminishing returns is increasing. In other words, it is taking consistently
more dollars of intervention to create an incremental increase in economic
growth.” Analysis and commentary at
http://stawealth.com/daily-x-change/1882-yellen-promises-more-evidence-suggests-less.html
WHAT THE ICE CREAM SCOOPER TOLD ME IN VENICE (Advisor
Perspectives)
[America is following Italy into the abyss…]“Given what's going on in America…given an economy that is much weaker than what the media tell us…I personally believe the Federal Reserve will not be able to pull back on money printing for months, if not years. The U.S. economy is falling into Europe's footsteps. Rome, too, thought that it could help its citizens by printing more and more coins and paper money not backed by anything of substance. It led to the fall of the Roman Empire. Sadly, "America the Great" is following in the same steps.” Michael Lombardi at…
http://advisorperspectives.com/dshort/guest/Michael-Lombardi-131115-A-Tale-from-Venice.php
MARKET REPORT
Thursday, the S&P was up 0.5% to 1791 (rounded).
VIX fell about
1% to 12.37.Thursday, the S&P was up 0.5% to 1791 (rounded).
The S&P 500 is 9.8% above the 200-day moving average
and that has been a level that has been trouble for the markets recently. Market internals don’t agree and suggest we
could climb higher before a pullback in the 5-10% range. That seems hard to believe since the S&P
500 is now at its upper 3-month trend line; but the index could always advance along the top trend-line.
So I have conflicting information and that means no-buying yet.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing rose 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 +212 (it was +224 Thursday). The 10-day moving average of change in the
spread was plus 14. In other words over
the last 10-days, on average, the spread has increased by 14 each day.
Market Internals were positive at the close today. This trend following indicator means the short-term
trend is up.
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. All other NTSM indicators are neutral. Overall,
NTSM is neutral. That is a broken record.
(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 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.
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.
