OMG! COAC! (Correction Over, All Clear)

The S&P 500 was up 4.3% today to 1245 on nearly twice its average monthly volume.  VIX fell over 9%.  A beautiful sight, we’re happy tonight, walking in a winter wonderland…

I almost posted about this last night.  The correction that we were in lasted 17-1/2 weeks.  The last significant correction we had ended in August of 2010 and it lasted…17-1/2 weeks.  Today’s rally started Monday as a technical response to the final low (see chart below) on the Wednesday before Thanksgiving and the Friday after.

We set sail for huge gains today when the Fed announced that the World’s Central Banks got together and agreed to make low interest loans to European Banks.  The last time the Central Banks got together was in 2008; the market was up 6% that day…it crashed later in the year and into 2009.  Do we have a crash coming?  Probably, but I sure don’t know when.

NTMS is BUY today; no surprise there. 

I bought back into the stock market at S&P 500, 1155 on 7 Oct after the 6 Oct NTSM buy signal.  I remain 100% long in the long term portfolio (100% stocks in the 401k.). (See the page “How to Use the NTSM System” – the link is on the right side of this page). 

I am 90% long in the trading portfolio. 

Just a reminder: 100% invested in stocks is way too much for most rational folks.   Don’t do it unless you have a high tolerance for risk. 

Consumer Confidence Up today – November 29, 2011

The Conference Board reported today, Tuesday that the Consumer Confidence Index was 56.0 in November.  That is up from the previous month’s value of 40.9 and it is the highest since July.  According to Briefing.com, Economists were expecting a reading of 42.5.

Frankly, this is an amazing number because Consumer Confidence often tracks the stock market and the stock market was down the entire month of November.  I see this as bullish for the market.

Keep in mind that most of what NTSM does is analyze technical indicators in the market (Sentiment, Price, Volume & VIX).  Bad news can trump technicals most anytime and the European situation may not have a solution that is neat and tidy.  A break-up of the Euro or European Bank failures could upset our markets at any time.  Further, Euro recession seems almost certain and that could hurt earnings here.  

In a Wall Street Journal article (WSJ) Saturday, Tim Smith of Maersk lines (a shipping company - real ships, as in containers) said “Almost all carriers are losing money now…and it looks like 2012 will be similarly challenging.”  The article said the problem was the “weak Europe-Asia” route. Mr. Smith said “The US looks a little better, but it’s difficult to call.”   Shipping can be a “canary in the coal mine” for the world’s economy.  So as we’ve noted before, it looks like Europe will be in recession soon if it isn’t already there.

OK…enough speculation; we just need to be wary and ready to sell if the music stops.

I commented earlier that those in the TSP (the Government’s 401k) might consider investing in the S-fund after the 3 October bottom.  The S-fund tracks the Wilshire 4500.  Small caps tend to outperform large caps after a recession.  Since the market priced-in a potential recession in the recent correction, the S-fund has been outperforming the C-fund (S&P 500).  Since the 3 October low, the S-fund (Wilshire 4500) has outperformed the C-fund (S&P 500) by about 7% as of yesterday’s close. 

The S&P 500 contains 13% financials and derives significant income from overseas.  Both of these factors make the S&P 500 more susceptible to problems in Europe so I plan to stay invested in the S-fund.  The US isn’t looking like recession yet, but problems in Europe might cause problems for our fragile economy.  If that happens, the S-fund won’t be a safe haven, but perhaps it will hold up longer than the S&P and I’ll come out slightly ahead before I sell (assuming the NTSM system generates a sell).

Closing volume data wasn’t available (as of this post) but that won’t matter today: NTMS is HOLD again.

I bought back into the stock market at S&P 500, 1155 on 7 Oct after the 6 Oct NTSM buy signal.  I remain 100% long in the long term portfolio (100% stocks in the 401k.). (See the page “How to Use the NTSM System” – the link is on the right side of this page). 

I am 90% long in the trading portfolio. 

Just a reminder: 100% invested in stocks is way too much for most rational folks.   Don’t do it unless you have a high tolerance for risk.

Big Bounce today

The S&P 500 was up almost 3% today while the VIX fell 7%.  The S&P was up only 2-days in the last 10 so it was overdue for a bounce.  

Volumes have been declining during the downturn since the end of October.  To me, that indicates that, at worst, the downturn (if it continues) will be a re-test of the prior low.  If the S&P 500 declines to 1099, I expect that the market will move up from there.  It is quite possible that we might not get down as low as 1099 again. 

If the S&P 500 was heading down toward a new low, volumes would have been increasing as more investors started selling.  At best?  Some are suggesting that today was the beginning of the Santa Clause rally.  That may be a bit premature, but I am still reasonably bullish in the sense I think that the S&P 500 will be higher before year end.  1275 by year end is not impossible. 

NTMS is HOLD.

I bought back into the stock market at S&P 500, 1155 on 7 Oct after the 6 Oct NTSM buy signal.  I remain 100% long in the long term portfolio (100% stocks in the 401k.). (See the page “How to Use the NTSM System” – the link is on the right side of this page). 

I am 90% long in the trading portfolio. 

Just a reminder: 100% invested in stocks is way too much for most rational folks.   Don’t do it unless you have a high tolerance for risk. 

Futures Up over 2% - Sunday night

Officially the NTSM computer system is a HOLD as of Fridays’ close.

Futures are up over 2% as of 8:45pm Friday night, so the options market is betting on a good day tomorrow.  I would expect a strong day Monday based on the good reports from retail sales on Black Friday.   

The market experienced a big downturn reversal that started 28 October after the bottom on 3 October.  I have mentioned before that a weakness of NTSM is when the market experiences a quick change in direction.  I would say that the downturn after a major bottom a month earlier qualifies as a quick turnaround so the NTMS analysis has not given us a sell signal that might have otherwise occurred.   That still may turn out to be the best choice, though.  As always, we’ll have to wait and see.

NTMS is HOLD.

I bought back into the stock market at S&P 500, 1155 on 7 Oct after the 6 Oct NTSM buy signal.  I remain 100% long in the long term portfolio (100% stocks in the 401k.). (See the page “How to Use the NTSM System” – the link is on the right side of this page). 

I am 90% long in the trading portfolio. 

Just a reminder: 100% invested in stocks is way too much for most rational folks.   Don’t do it unless you have a high tolerance for risk.

Volume Down Again – and so were the Markets

I may not post over the weekend since things  will be busy with Holiday family visitors.

The S&P 500 was down 2.2% to 1162 Wednesday and the VIX rose to 34 up 6%.

A German Bond auction went poorly with fewer buyers than expected and yields rose.  Germany is the safe haven economy and the strongest of the Euro zone countries…supposedly.  So this development is not good news.  In fact, I think it is VERY bad news.

Sentiment is oddly high considering that the S&P is falling fast.  The 5-day sentiment indicator is 59%-bulls as of yesterday’s close.

The VIX indicator is stuck in a relatively high range and isn’t generating a sell signal that would get me out of this mess.  I’ll be taking a look at the indicator to adjust it for specialized conditions.  It is going to take some work and then back testing so I don’t expect it to help make a decision in this downturn.

Volume fell again today and was about 80% of the 20-dMA of volume on the NYSE (pre-Holiday).  At this point that doesn’t mean much since we are on the way to a re-test of the 1099 closing low we had on 3 October. 

I considered selling today, but it was late and the web site guidance was confusing.  It looked like a sell request wouldn’t be processed until Friday night because of the Holiday.  If that was the case, why not wait and decide on Friday?

As of today the NTSM system is up 3.5% on the year.  The S&P 500 is down 8%

NTMS is HOLD.

I bought back into the stock market at S&P 500, 1155 on 7 Oct after the 6 Oct NTSM buy signal.  I remain 100% long in the long term portfolio (100% stocks in the 401k.). (See the page “How to Use the NTSM System” – the link is on the right side of this page). 

I am 90% long in the trading portfolio.  Since the trading portfolio is in the QQQ this time, I’ll sell it when we get a buy indication and buy a 2xETF.   That way I can take a tax loss and with a 2x fund be better off as the market recovers.

HAVE A GREAT THANKSGIVING!

Down Again and waiting for a turn-around

The S&P 500 was down 0.4% to 1188 Tuesday.

We just can’t catch a break on the news.  GDP was revised down to 2.0 from its previously reported value of 2.3%.  It still shows a good progression, but Sam Stovall said that in all previous times that GDP has been 2% or less for 2-successive quarter the US has slipped into recession.  Perhaps, but the news was not all bad.  I heard some more detailed analysis on PBS.  The downward revision was due to companies reducing their inventories and the commentator said that and that would likely be seen as a positive in the next quarter or two as businesses build back inventories.

Consumer spending is up so those who claim the inventory declines are bad news (and in some cases they are) will likely not be right this time around.

The S&P 500 is 2.5% below 1218, its level on 1 November.  Volume has continued to fall at each close around that level and market internals have been rising.  To me it looks like the S&P should be moving up soon; still, the odds now are pretty good that we’ll see the S&P 500 test the 1099 level again.  The only way to avoid that outcome is for the bleeding to stop now.

The Navigate the Stock Market analysis is still HOLD.    

I bought back into the stock market at S&P 500, 1155 on 7 Oct after the 6 Oct NTSM buy signal.  I remain 100% long in the long term portfolio (100% stocks in the 401k.). (See the page “How to Use the NTSM System” – the link is on the right side of this page). 

I am 90% long in the trading portfolio.  I am over-committed (maybe I should be committed) considering that bad news.

Just a reminder: 100% invested in stocks is way too much for most rational folks.   Don’t do it unless you have a high tolerance for risk. 

Super Committee Fails – Is anyone surprised?

Monday the S&P 500 fell nearly 2% and VIX rose about 3%.

Monday was another relatively low-volume day on the NYSE, but then, my volume analysis has proved to be worthless recently, proving once again that is possible to keep going down on low volume.

It will be a while before we find out if the NTSM analysis is right or wrong.   I developed this computer model was to avoid losses greater than 10%.  If the system is set to respond to every little downturn, I’d be day-trading the retirement portfolio and that is not the goal here; however, I will be looking at the NTSM VIX indicator to see if there are ways to improve the system.

In the mean time, VIX is still not rising fast enough to issue a sell signal.  VIX needs to get up around 38 to generate a sell signal.

Many reported that the losses today were the result of the Failed Super Committee negotiations.  That’s an odd conclusion; the Super Committee had not met as a group since 1 November so there was very little hope that a group of intractable ideologues, appointed by other intractable ideologues, would succeed.

The good news?  The Bush tax cuts expire in 2-years and there will be 100-Billion in cuts each year for the next 10-years as a result of the previously passed legislation so the deficit will improve in the future unless our incompetent Politicians backtrack again.

NTSM was HOLD Monday.

I bought back into the stock market at S&P 500, 1155 on 7 Oct after the 6 Oct NTSM buy signal.  I remain 100% long in the long term portfolio (100% stocks in the 401k.). (See the page “How to Use the NTSM System” – the link is on the right side of this page). 

I am 90% long in the trading portfolio.  I am over-committed (maybe I should be committed) considering that bad news keeps coming.

Just a reminder: 100% invested in stocks is way too much for most rational folks.   Don’t do it unless you have a high tolerance for risk.