Major Trend Index

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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The Major Trend Index was unchanged at 1.10 in the week ended July 18th, hovering just 0.05 above its 0.95-1.05 neutral zone. The combination of inflated investor sentiment and weakening market internals is a negative one for the very near-term, and we cut net equity exposure in tactical funds to 60% (from 65-66%) to position for potential late-summer trouble.

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The Major Trend Index rose 0.01 to 1.10 in the week ended July 11th, with large, opposing moves in the sentiment and market action work mostly cancelling one another out. Net equity exposure in the Core and Global Funds was trimmed by 5-6% last week to a current target of 60%.

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              The Major Trend Index dropped 0.04 to 1.09 in the week ended July 3rd, matching its lowest reading since last August but remaining in positive territory. Declines in both our sentiment and market action categories drove the decline, and we responded this week by trimming net equity exposure in the Core and Global Funds to 60% (from prior levels of 66% in the Core Fund and 65% in the Global Fund).

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We sense that the lack of volatility in the stock market in recent months is beginning to unnerve even the bulls, who seem increasingly compelled to do something in response to the relentless new highs.

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The Major Trend Index rises 0.02 to 1.13 for the week ending June 27, 2014.

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The Major Trend Index registered a third consecutive small loss in the week ended June 20th, falling 0.02 to 1.11.

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