Green Book March 2016
Bear Market Rally Or New Upswing?
Richard Russell—who wrote Dow Theory Letters for almost 60 years before his death last year—observed that “bear market rallies look better than the real thing.”
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Featured Articles
MTI Negative, But Improving
The Major Trend Index rose 0.10 points over the last five weeks. Despite its improvement, the underlying message is that a cyclical bear market remains underway.
Labeling The New Up-Leg
The short-term market surge certainly possesses the hallmarks of many previous bear-killers (or correction-killers)…but it also sports the look of many historical bear market rallies.
Is Defense Overpriced?
Relative valuations of Staples and Utilities sectors already reflect a “flight to quality” effect. Investors looking to add some economic/stock market defense should focus on the cheaper Health Care groups.
Big U.S. Banks: We Have A Motion, Is There A Second?
YTD the S&P 500 has fallen 2% while the S&P 500 Banking industry group is down over 12%—a shortfall that has the attention of value investors and contrarians seeking a chance to buy high-quality banking franchises at fire-sale prices.
Bottom-Fishing In Energy: Beware Of Bankruptcy Risks
New developments have lifted sentiment toward oil and Energy names, but we caution bottom-fishers to be mindful of risks. The fundamentals in the oil patch do not yet support strong oil prices going forward.
Our Most Contrarian Group Ideas
We use our Group Selection (GS) Scores to identify the potential for a catalyst, and to gauge the health and future performance potential of those groups out of favor by analysts.
Purchased Specialized Finance: GS Score Surges
We see solid prospects for potential industry growth; consolidation and a full-blown industry evolution have resulted in group constituents having more in common than ever before.
New Bond Market Record: G5 10-Year Average Hit All-Time Low
Despite the improvement in market sentiment, U.S. bond yields were dragged lower by their international counterparts.
Table of Contents
Stock Market
- Bear Market Rally Or New Upswing?
- Labeling The New Up-Leg
- Ready For Year Eight?
- Another Look At Median Valuations
- Beta Back In Vogue?
- Is Defense Overpriced?
- Foreign Stocks Set For A New “Bear”-ing?
- Where’s The Profit Leverage?
- Just A Costly Correction?
- Implications Of Oversold VLT Momentum
Of Special Interest
Macro Monitor
- New Bond Market Record: G5 10-Year Average Hit All-Time Low
- Muddle-Through Still Has The Benefit Of The Doubt
- Risk Aversion Index—Ticked Lower But Stayed On “Higher Risk” Signal
- US Bonds
Equity Strategies
- Our Most Contrarian Group Ideas
- Purchased Specialized Finance: GS Score Surges
- Bottom-Fishing In Energy: Beware Of Bankruptcy Risks
- Highlighted Attractive Groups
Quant
Market Internals
Portfolios
- Core & Global Asset Allocation Portfolios
- Domestic & Global Long-Only Portfolios
- 100% Short Portfolio: AdvantHedge
Major Trend
Estimating the Downside
At Random
MTI Negative, But Improving
The Major Trend Index rose 0.10 points over the last five weeks. Despite its improvement, the underlying message is that a cyclical bear market remains underway.
Labeling The New Up-Leg
The short-term market surge certainly possesses the hallmarks of many previous bear-killers (or correction-killers)…but it also sports the look of many historical bear market rallies.
Is Defense Overpriced?
Relative valuations of Staples and Utilities sectors already reflect a “flight to quality” effect. Investors looking to add some economic/stock market defense should focus on the cheaper Health Care groups.
Big U.S. Banks: We Have A Motion, Is There A Second?
YTD the S&P 500 has fallen 2% while the S&P 500 Banking industry group is down over 12%—a shortfall that has the attention of value investors and contrarians seeking a chance to buy high-quality banking franchises at fire-sale prices.
Bottom-Fishing In Energy: Beware Of Bankruptcy Risks
New developments have lifted sentiment toward oil and Energy names, but we caution bottom-fishers to be mindful of risks. The fundamentals in the oil patch do not yet support strong oil prices going forward.
Our Most Contrarian Group Ideas
We use our Group Selection (GS) Scores to identify the potential for a catalyst, and to gauge the health and future performance potential of those groups out of favor by analysts.
Purchased Specialized Finance: GS Score Surges
We see solid prospects for potential industry growth; consolidation and a full-blown industry evolution have resulted in group constituents having more in common than ever before.
New Bond Market Record: G5 10-Year Average Hit All-Time Low
Despite the improvement in market sentiment, U.S. bond yields were dragged lower by their international counterparts.
Stock Market
- Bear Market Rally Or New Upswing?
- Labeling The New Up-Leg
- Ready For Year Eight?
- Another Look At Median Valuations
- Beta Back In Vogue?
- Is Defense Overpriced?
- Foreign Stocks Set For A New “Bear”-ing?
- Where’s The Profit Leverage?
- Just A Costly Correction?
- Implications Of Oversold VLT Momentum
Of Special Interest
Macro Monitor
- New Bond Market Record: G5 10-Year Average Hit All-Time Low
- Muddle-Through Still Has The Benefit Of The Doubt
- Risk Aversion Index—Ticked Lower But Stayed On “Higher Risk” Signal
- US Bonds
Equity Strategies
- Our Most Contrarian Group Ideas
- Purchased Specialized Finance: GS Score Surges
- Bottom-Fishing In Energy: Beware Of Bankruptcy Risks
- Highlighted Attractive Groups
Quant
Market Internals
Portfolios
- Core & Global Asset Allocation Portfolios
- Domestic & Global Long-Only Portfolios
- 100% Short Portfolio: AdvantHedge
Major Trend
Estimating the Downside
At Random
Perception for the Professional
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