“…the present moment likely represents the best opportunity to reduce exposure to stock market risk that investors are likely to encounter in the coming 8 years… The fact is that since 2000, the S&P 500 has achieved an annual total return of 4.1% annually, and doing so has required a speculative push to valuations exceeding those of every other market cycle in history, including 1929. In the interim, we’ve seen two separate market collapses of 50% and 55%, and I suspect that a third is in the offing. But again, the financial markets feel wonderful here precisely because security prices today already stand at the same levels that are likely to be seen 8-10 years from today, with one or two exciting roller-coaster rides in-between." John Hussman, PhD, Weely Market Commentary at...
http://www.hussmanfunds.com/wmc/wmc150302.htm
Perhaps, but John Hussman has been saying this for several years. I think we go higher. How much remains to be seen.
MARKET REPORT
- Tuesday, the S&P 500 was down about 0.5% to 2108 (rounded).
-VIX rose about 6% to 13.86.
-The yield on the 10-year Treasury Note rose to 2.12%.
RSI
Relative Strength Index (RSI) was 72 Tuesday – a neutral indication for the short term.
PULLBACK
A pullback is getting closer, but I can’t tell whether it’s a few days away or a few weeks. A pullback would be a 5-6% normal cycle down unless the news gets bad, but my guess is that the market goes up a bit more.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) remained 54% 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 +89. (It was +141 Monday). The 10-day moving average of change in the spread remained minus-4. In other words, over the last 10-days, on average, the spread has DECLINED by 4-each day.
Internals remained neutral 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
Tuesday, the NTSM analysis remained BUY. The PRICE and VIX indicators are positive; VOLUME and SENTIMENT indicators are neutral, although sentiment remains extremely high.
This just means that momentum is up for now. The important BUY call was on 29 October, about 1% above the October bottom.
I remain fully invested at 50% invested in stocks in the long-term portfolio. 50% is conservative, but appropriate for a retired guy.
My position in the S&P 500 is very small now. I have invested in the Dow Jones US Completion Total (^DWCPF) and an EAFE based fund to get some international exposure because they are the only small-cap and international choices in my retirement account. (The DWCPF includes all stocks EXCEPT the S&P 500. The DWCPF is 1.8% ahead of the S&P 500 since 1 February.)
