The mini bond market sell-off in September was fueled by a string of positive developments, which should support the case for further upside in the Economic Surprise Index in the fourth quarter.

A fascinating aspect of long-running bull markets is the emergence of money-spinning strategies that come to be seen as “sure things.”

We believe the continued strength of this seemingly ageless bull market is due in part to the weakening U.S. dollar, which impacts the real economy and financial asset returns alike.

We just completed a simple study for those market bulls who might find themselves temporarily lacking in confidence (assuming such an animal isn’t extinct by now).

The Major Trend Index has bounced back into positive territory, and we expect an already-expensive U.S. market to make even higher highs later this year and into early 2018. But we are keeping an eye on the Intrinsic Value work to assess the potential losses that might occur when cyclical conditions eventually turn hostile—possibly in later 2018 or in 2019.

While still too early to call an upturn in inflation, we believe at least expectations are perhaps low enough to make the odds in favor of upside surprises in the near term. We don’t think one small beat on the CPI is likely to turn the Fed more hawkish at the upcoming September FOMC meeting.

Last month we assessed the effectiveness of using valuation factors as a basis for country allocation. Using 20 years of data, our results showed that they work quite well specifically for Emerging Market (EM) country-rotation, however, the same valuation-based strategy does not appear to be value-added for Developed Market (DM) allocation/rotation.

Bond investors residing in the Lower For Longer© camp no doubt feel vindicated by the summer rally that’s taken yields on 10-year Treasury bonds to as low as 2.06% in early September.

We believe this bull market still has legs… but so too might the mini-correction that’s hit mainly the secondary stocks thus far.

Our Major Trend Index (MTI) recently fell from “positive” toward stocks to a “neutral” reading, leading us to trim bullish equity positions in our tactical portfolios.

August factor performance was more of the same: Value underperforming everything else and extending its losing streak relative to Growth.

With the Major Trend Index now in “neutral” territory, and several well-known market strategists urging increased caution and risk awareness, we offer our perspective on defensive investing from the standpoint of our group work.

If we look beyond the daily noise from North Korea, the global macro picture still fits our “Goldilocks” view pretty well.

This morning’s weaker-than-expected reading on wage inflation will no doubt boost applications to the “lower for longer” school of thought on interest rates…

This year’s cooperative bond market hasn’t helped rekindle much enthusiasm for bond-like stocks like the REITs and the Dividend Aristocrats, which are up 3% and 6% YTD, respectively, compared with a 9% gain in the S&P 500.

The end of August means the second quarter earnings season is almost in the books.

The CPI numbers have disappointed five months in a row. The real bad news for inflation hawks is that the weakness in core CPI is broad-based. There is hope for inflation to stem its recent weakening trend soon as the Chinese CPI has already stabilized and started to turn up.

With this week’s losses, Small Caps have relinquished all of the massive outperformance they enjoyed in the month following the presidential election.

The stock market has a tendency to lay an egg during years ending in “7,” specifically during the late summer and fall… ‘Year Seven’ also tends to see a massive volatility spike…

The S&P 500 and DJIA were up 10-11% on the year through early August—solid, but not quite the “melt-up” scenario we’d envisioned earlier this year…We think S&P 500 2,550-2,600 will be achieved, but not until year-end…