Major Trend Index
The Mixed Messages Of January
It was a shaky 1998 start, but the U.S. equity markets got it together after the big hit on January 9th (-3%).
The Current Stock Market Environment
After wavering in neutral several weeks, Major Trend Index turned negative November 24...Go to sidelines. Market rallied strongly in November but fund investors uncharacteristically stayed on the sidelines. Is this increased caution or seasonality?
The Greatest Drama on Television?
Major Trend Index downshifts to neutral. Big loss in Technical measures due to late October sell off. We are in a critical market period...Have Mr. And Ms. Main-Street become more skittish after experiencing a dose of downside risk?
How Was Your Summer Holiday?
Major Trend Index faded to High Neutral in August, but will likely be propelled back to Positive by strong September 2nd market…Valuations still off the charts, but new valuation era looks like it’s still with us.
Major Trend Index is Neutral
The strong and broad May stock market moved the multi-factor Major Trend Index discipline up from Negative to Neutral status.
Major Trend Index Positive…Again
Major Trend now Positive, with ratio of 1.16...Biggest bull market in history rolls on, pushing farther above past valuation extremes. Key client questions on stock market and Major Trend answered.
Interim Memo: Major Trend Index Turns Negative
Major Trend turned negative March 24th...Clients notified via Interim Memo. Bull market topping out or possibly already has. Market breadth measures signaling significant market deterioration.
In “Never Never Land”
It’s “Never Never Land”...stock market now above all past valuation extremes. Ultimately, a big bear market is out there, but shorter term it may go higher.
Year-End Cross Currents Start Early
While September was a surprisingly strong month, October was just confusing. Year-end cross currents seem to have started early this year. Major Trend Index now just barely in neutral territory with a ratio of 0.95.
A September Surprise (To Me)
September a surprisingly strong month, with 4%-5% gains for most market indices. Significant MTI improvement, but still a ways from Neutral.
August: Few Surprises
The stock market performed pretty much as expected in August, although experiencing a somewhat unusual fade at month end. Major Trend remains negative. Some improvement but still a long way from Neutral.
A Major Market Top in the Making
Since turning negative on July 2, the Major Trend Index has deteriorated very rapidly. Major stock market top now seems to be developing. There are now five stock market positives and seven negatives.
What Has Changed Since February 2, 1996?
Comparison between February 2, 1996 Major Trend (when we last went positive) and today’s calculation shows the shift primarily driven by Economic/Monetary/Inflation (higher interest rates), and by the Supply/Demand category.
Major Trend Index Fades to Negative Status
Factors affecting shift in Major Trend: fade in market momentum...decline of cash flow into U.S. focus equity funds...vast new supply of equities. Despite modifications to help adjust for this “new era” environment, it wasn’t enough to offset current negatives.
On the Borderline
Major Trend close to reverting to negative status with ratio at 0.95. Shades of 1968, that great speculative garbage market. 1996 is looking like a replay...it’s just like old times...greed, excitement, performance chasing, and no earnings IPO’s.
Summary View
U.S. market in a temporary new valuation era and reminiscent of last leg up in Tokyo stock market in late eighties. Driving force has been the public’s belief that you “can’t lose” with equity fund shares.
Current Market View
Major Trend remains positive, total equity exposure remains at 58%, using index options to minimize and reduce risk. The “new valuation era” continues. Demand for U.S. equity funds continues to be key driver.
Major Trend Index Turns Positive
Major Trend Index now positive, after changing weight of equity fund flows. Additional changes made in technical breadth and momentum measures should increase responsiveness when the current “new valuation era” closes down.
Leuthold Major Trend Index: Revisions Are Overdue
Major Trend Index modification will be made this week...weights of two mutual fund inflow components will be doubled due to their significance.
So Far, a Not So Happy New Year
What we will do if the Major Trend Index turns positive (it moved to neutral)?
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