Tuesday, the S&P 500 was UP 0.2% to 2082 (rounded).
VIX was down about 3% to 14.80.
The yield on the 10-year Treasury Note was 2.26
TIME TO BUY
The 5-10-20 timer switched to a positive reading along
with market internals so the NTSM analysis is BUY. I had previously calculated 2084 as a
crossover point, however, moving averages shift daily too, so it is somewhat of
a moving target.
Chart wise the S&P 500 is at its upper trend line so,
buying now means that I sold low and bought high during the recent wild
turnaround. Ouch. (I said worse things the other day, but there
is no point in publishing them here. I feel stupid enough.)
There is chatter of a turn to the downside in January and
even the Wall Street Journal did an article on the possibility. That may be
what I think too, but an old trader used to say, “Trade what you see not what
you think.” In other words, I am increasing stock investments to 50% invested
in stocks as of tomorrow at the close, based on strong numbers, even if a minor
pullback may be in the offing.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) was higher to 56% at the close Tuesday. (A number above 50% is usually GOOD news for
the markets.) New-highs outpaced New-lows Tuesday. The spread (new-highs minus
new-lows) was +265. (It was +169 Monday). The 10-day moving average of change in the
spread was +26. In other words, over the last 10-days, on average, the spread has
INCREASED by 26-each day.
Market Internals are now POSITIVE on the market.
Market Internals are a decent trend-following analysis of
current market action, but should not be used alone for short term trading.
They are usually right, but they are often late. They are most useful when they diverge from
the Index. In 2013, using these
internals alone would have made a 16% return vs. 30% for the S&P 500 (in on
Positive out on Negative – no shorting).
Of course, few trend-following systems will do well in an extreme
low-volatility, straight-up year like 2013.
NTSM
The long-term NTSM system analysis remained BUY today. The Buy
signal is based on the 5-10-20 Timer and market internals.
MY INVESTED STOCK POSITION
I will increase my stock allocation to 50% invested in
stocks as of 24 Dec.
