MTI
More Trouble Ahead
On High Alert
August is “National Eye Exam Month,” but this is the rare year we can confidently recommend that you skip it.
Stock Market Observations
The U.S. stock market has largely shrugged off the latest round of worries related to China’s stock market collapse, the new down-leg in crude oil, a more hawkish tone in Fed-speak, and sizable second-quarter declines in S&P 500 sales and earnings.
Summer Trouble?
New late-June highs in NASDAQ, Small Caps, and key Financial groups weren’t enough to stem the past few weeks’ slide in the Major Trend Index, which has landed back in its neutral zone (1.01 reading).
A Venerable Monetary Indicator Turned Negative
The smoothed, 26-week rate-of-change in the DJ Corporate Bond Index, a reliable indicator of monetary conditions over many different market and economic cycles, turned negative in mid-June.
Flying By Instruments
The safest highs to sell in the stock market are “lonely” new highs. Fortunately, the April 24th bull market high in the S&P 500 was anything but, as that index enjoyed a varied swath of Large Cap, Small Cap, and foreign company (although the DJIA was a mysterious no-show).
Another Upleg?
The stock market generated enough positive evidence by the second week of February to knock us from our comfortable perch on the fence. We covered a portion of our equity hedges on February 12th, bringing net equity exposure in the Core and Global Funds up to 58% from the 50% level that had prevailed since November.
The Major Trend Index Dropped 0.02 to 0.97 in the Latest Week
The Major Trend Index dropped 0.02 to 0.97 in the latest week, led by a steep drop in the Momentum/Breadth/Divergence category.
Stuck In Neutral?
Extreme market viewpoints get the headlines, but it’s baked into our disciplines that we will (occasionally) be noncommittal.
MTI Rose to 1.04 - High Neutral
The Major Trend Index rose 0.03 to a high neutral reading of 1.04 in the week ended November 21st, driven (unsurprisingly) by a healthy gain in the Momentum/Breadth/Divergence work. The Core and Global Funds remained positioned with net equity exposure of about 50%, but we are prepared to cover some equity hedges if this work strengthens in the weeks ahead.
A Game Of ‘What If?’
Considering the Major Trend improvement, new bull market highs (Nov. 6th) on the S&P 500, DJIA, and DJ Transports, we present a list of talking points we’d use if forced to make a bullish stock market case.
Momentum/Breadth/Divergence Dips But Still Healthy - MTI 1.12
Despite last Friday’s close in the DJIA at cycle highs, the Major Trend Index for the week slipped 0.04 to 1.12.
The MTI, And More Market Maxims...
Someday in the faraway future, in the midst of a low-volatility, peace-time bull market, we plan to write a Green Book “Of Special Interest” piece on the investment wisdom of Yogi Berra. “Ninety percent of the game is half mental.” Classic. “You can observe a lot by watching.” Words that I live by.
Major Trend Moves To Neutral, But Not All Hope For The Bulls Is Lost
Deteriorating Technicals drove the move to Neutral, but a new positive reading in the Attitudinal category gives some hope to the bulls.
Summer Doldrums?
Give those who’ve advised investors to “Sell In May” over the years some credit: they’ve never been too specific.
Ruminations On The Major Trend Index
There are many reasons to think the MTI’s cautionary message should be taken seriously.
Everyone Gets A Trophy
It’s not just kids’ sports where the achievement bar has been lowered.
Perception for the Professional
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