Major Trend Index

The Major Trend Index dropped 0.03 to 0.99 in the latest week, remaining within the neutral zone in which it’s resided since the end of October.

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We don’t yet know whether our second-half adjustments to equity exposure will prove premature or just plain wrong. Our tactical funds remain positioned with below-average net equity exposure of about 50%.

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The Major Trend Index dropped 0.02 to 1.01 in the latest week, its third consecutive neutral reading after four weeks in bearish territory. While the blue chip U.S. averages continue to record nominal new highs on an almost daily basis, the relatively modest gains in the MTI’s Momentum/Breadth/Divergence category during this bounce suggest the market’s internal underpinnings remain weaker than in the first half of 2014 (and throughout 2013, for that matter). Our tactical funds remain positioned with 50% net equity exposure.

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The Major Trend Index rose 0.02 to 1.03 based on data for the week ended November 7th. This reading stands on the high end of its Neutral zone, and prompted us to cover some of the equity hedge in our tactical accounts. Net equity exposure in both funds today stands at 50%, up from 43% in the Core Fund and 41% in the Global Fund previously.

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The Major Trend Index rose 0.04 to 0.93 in the week ended October 24th, just two ticks below its neutral band. The technical category scored a significant gain after last week’s market surge, while Supply/Demand dynamics became somewhat less negative. Nonetheless, the work taken as a whole continues to support a defensive stance towards equities in the immediate term, and net equity exposure in both the Leuthold Core Fund (38%) and Leuthold Global Fund (40%) remains on the low end of its normal range.

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The Major Trend Index rose 0.06 to 0.89 in the week ended October 17th, remaining within its negative zone for a third consecutive week. This work remains consistent with further corrective action in the stock market, and our tactical funds remain positioned with below-average net equity exposure of 40%.

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Major Trend Bearish at 0.83

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Latest MTI calculation deteriorated to Negative (based on data for the week ended October 3rd). We expect further significant losses in the stock market near term and have cut net equity exposure in Core and Global asset allocation portfolios to 40%.

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The Major Trend Index weakened to 0.97 in the week ended September 26th, down from 1.01 in the prior week and the lowest reading since November 2011. The stock market remains in a high-risk zone, and we recommend investors take advantage of market strength to trim stock holdings. The Core and Global Funds now target net equity exposure of 45%, down from 55% entering this week.

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The Major Trend Index fell 0.01 to 1.01 for the week ending September 19th, remaining within its neutral band (0.95-1.05) for the eighth consecutive week. This work continues to highlight an elevated risk level for stocks in the near term, and we are maintaining a reduced net equity exposure level of 55% in both the Core and Global Funds.

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The Major Trend Index fell 0.01 to 1.02 in the week ended September 12th, with a substantial drop in the technical category offsetting gains in three other areas. This work remains within its 0.95-1.05 neutral zone, and we continue to target net equity exposure of 55% in the Core and Global Funds.

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              The Major Trend Index rose 0.01 to 1.03 for the week ending September 5th, with small fluctuations across the five categories mostly cancelling one another out. The MTI has been within its Neutral band (0.95 to 1.05) since the week ended August 1st, supporting a more defensive stance towards the stock market. Both the Leuthold Core and Global Funds have targeted net equity exposure of 55% since August 4th.

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The weaker pattern of MTI readings since August 1st supports the reduced net equity exposure in our tactical portfolios (targeting 55% net equities since early August).

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The Major Trend Index rose 0.03 to 1.02 for the week ending August 29th, with a solid gain in the technical category proving insufficient to lift the MTI out of its neutral zone. We remain near-term cautious on the stock market and continue to maintain reduced net equity exposure levels of 55% in both the Core and Global Funds.

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The Major Trend Index fell 0.04 to 0.99 in the week ended August 22nd, remaining within its neutral zone and supporting our recently reduced net equity exposure level of 55% in the Core and Global Funds.

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 The Major Trend Index rose 0.01 to 1.03 in the week ended August 15th, the third consecutive reading within its 0.95-1.05 neutral zone. Both the Core and Global Funds remain positioned with reduced net equity exposure of 55% pending a decisive move in our work.

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The Major Trend Index rose 0.02 to 1.02 in the week ended August 8th, remaining within its neutral zone (0.95 to 1.05) for the second consecutive week. We are maintaining a reduced net equity exposure level of 55% in both the Core and Global Funds while awaiting the next definitive swing in this quantitative work. While the Index did rise 0.02 on the week, recent market action has tipped two major sub-models very close to bearish inflections that would almost certainly drive the MTI into bearish territory.

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Net equity exposure in the Core and Global Portfolios trimmed to 55%. Chances are good that any near-term market set-back will be measured in weeks (not months), and contained within the parameters of either a shallow (under 7%) or intermediate (7-12%) correction.

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              The Major Trend Index dropped 0.02 to 1.08 in the week ended July 25th, with four of five categories declining during the period. The string of weakened readings this summer prompted us to cut net equity exposure in our tactical funds on July 10th by 5-6% to 60%, and we stand ready to hedge equity positions further if our disciplines continue to deteriorate.

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