Major Trend Index
Continuing Client Questions
If the Index does shift to the positive side, how can you (in view of your own intrinsic value work) justify aggressively buying stocks? Considering the downside risk, is it really worth it to aggressively buy equities if your Index now turns positive? If your Index does turn positive, what are the chances it might be a whipsaw?
Still Cautious, But…
The May market surge was both impressive and unexpected. Most of Wall Street was surprised by the magnitude of the move.
Client Questions About Our Equity Strategy
Most, but not all of these are actual client questions recently fielded by The Leuthold Group. A few are questions we think some of you might like to ask, but are reluctant to do so.
No Change in Our Outlook
The stock market bent in April but did not break. Nevertheless, our market disciplines continue to repeat their dreary message.
Stock Market Remains Vulnerable
Our Major Trend Index remains decidedly negative. The current ratio of 0.67, although improved from a week ago, is about the same as a month ago. Thus our opinion is unchanged. It appears we are in the early stage of a cyclical bear market.
Minor Adjustments To Major Trend Index
In February, minor adjustments In the Major Trend Index Included adding a few new components.
Defensive Posture Maintained
It continues to appear that the stock market is forming a major cyclical bull market top. The Major Trend Index continued to deteriorate in November and indicates the market is in poor health and a cyclical bear market is likely.
Stock Market: Major Trend Index Now Negative
With the October 30th calculation, The Leuthold Group’s Major Trend Index has shifted into negative territory. Thus, our disciplined weight of the evidence approach dictates a very cautious policy.
Understanding the Major Trend Index
The purpose of this issue’s “In Focus” is to provide readers with a better understanding of our Major Trend Index and answer some of the typical questions asked about this work.
Watch Out for Those Cannonballs
The 1987-89 bull market game is not over according to our work, but indications are that it’s in the 8th or 9th inning. In the coming months, as “soft landing” and “fly by” thinking shifts to “recession thinking”, the stock market could get pretty nasty.
Current Outlook
The 1987-89 bull market game is not over according to our work but indications are it’s in the 8th or 9th inning. In the coming months, as “soft landing” and “fly by” thinking shifts to “recession thinking”, the stock market could get pretty nasty.
“Just Get Invested!”
Wall Street pulled down the caution flags a few months ago. Correction became the consensus. But it wasn’t to be. All those newly converted late arriving bulls who were planning to add stocks on a 7%-10% correction never got their chance to put the cash to work.
Current Outlook
New highs for the market are still expected in 1989. But I think it is quite likely that the 1987 high will, for a while at least, be a significant resistance zone.
We Now Have a Lot of Company
One of our clients recently said, “I suppose you guys will turn bearish now that we have all come to agree with you.” Well, not yet. The majority can be right for a while. Sometimes it pays to be with the crowd. Our work tells us this is one of those times.
Current Outlook
The Major Trend (cyclical bull market) is still healthy, but chances of an intermediate correction have increased.
The April Surprise
April’s stock market action surprised the majority. The “surprising” strength in the stock market was fueled by a 50 basis point decline in short term rates, continuing evidence of an economic slowdown and less terrifying inflation numbers.
No Change in Outlook
March market action surprised many observers. The market recorded a gain for the month. To many it had appeared an intermediate correction (or worse) was underway. But instead of breaking the February lows, the stock market bounced.
Almost No Change: Still Bullish
Did February mark the beginning of a 7%-10% intermediate stock market correction? I don’t think so. The market gave up some ground last month, but not much and it caused very little deterioration in our indicators.
All Our Systems Are Still “Go”
After a 300-point move in the DJIA in a little over two months, a number of observers view the market as “overbought”. However, we see no significant evidence among our indicators that supports this opinion.
All Systems Are “Go”
As indicated in our November 29th Interim Memo, our Early Warning Index, which is designed to detect intermediate stock market bottoms, turned positive as of the November 28th calculation. I expect a significant rally in December.
Perception for the Professional
March 2026 Issue
Featured Articles
Sector Navigator
March 2026 Issue
