Investor sentiment remains neutral (the rally from extreme pessimism is impressive). The best buying opportunities tend to come at points of extreme pessimism and the best hedging opportunities tend to come at points of extreme optimism.
The long-term trend is negative, suggesting caution. I’m neutral on the market at best and believe risk remains high. Valuations are high and the cyclical bull move is aged. The CMG Managed High Yield Bond Program moved to a sell signal this week after a strong rally and profitable trade. The Zweig Bond Model remains in a buy signal. The 13/34–Week EMA trend is moving closer to a cyclical bullish signal (that is the point at which the shorter term 13 week moving average trend line crosses above the longer term 34 week moving average trend line). That bears watching (no pun intended).
The S&P 500 Index may be topping. Price momentum is peaking and beginning to roll over (red circles in the middle of the following chart).
The current opinions and forecasts expressed herein are solely those of Steve Blumenthal and are subject to change. They do not represent the opinions of CMG. CMGs trading strategies are quantitative and may hold a position that at any given time does not reflect Steve’s forecasts. Steve’s opinions and forecasts may not actually come to pass. Information on this site should not be used as a recommendation to buy or sell any investment product or strategy.