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One year ago, the NFTRH market stance was forced back into caution mode as the 'early warning' EMA 20 and SMA 50 were violated yet again on the broad market. What came next was the downside capitulation in March.

From NFTRH18 dated 1/31/09:

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In yesterday’s update, it was noted that most holdings that are positively correlated to the economy were sold from NFTRH accounts. This was in part due to the continued degradation of the broad stock market and in part due to the idea that we have come a long way since the October bottom and with risk high, as it is now, I prefer to be sidelines with cash. I was brave when it was called for as the gold stocks demanded my funds. But this mess, this ship of fools will make no such demand upon me.

Risk is very high as our tolerance in the form of the SMA 50 and EMA20 were violated on the downside and then this week’s official ‘hope’ pump ran into failure at the very same moving averages. Making matters worse is the down triggered MACD and confirming TRIX, both of which are below zero. The market has not broken last ditch support, but it can attempt to save itself without NFTRH funds aboard.

[SPX chart omitted]

Another factor weighing against the bulls is the Trannies, still clinging to support, but having violated our tolerance of 3200. Again, I am not fundamentally engaged with this stuff so it is best to live to fight another day. The economy is in a shambles and the historic presidency is bringing with it a lot of crosscurrents and hope does not seem to be finding traction. When the CPC put/call ratio moves to the 1.20 area on its 20 day EMA, things may begin to get interesting. In short, it appears hope needs to be annihilated much like most asset classes, before its revival.

[Put/Call ratio chart omitted]

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