The market cap of the top five S&P 500 companies: $4.1 trillion… The market cap of the bottom 282 S&P 500 companies: $4.1 trillion. Just saying…
Risk-On or Risk-Off?
In Friday’s On My Radar, Steve Blumenthal discusses his favorite market risk-on/risk-off indicator: the Ned Davis Research CMG U.S. Large Cap Long/Flat Index. The Index measures “market breadth,” which, generally speaking, is a measure of market activity, such as how many stocks are advancing higher in price and how many are declining, how many are making new highs and new lows, is the trading volume advancing or decreasing in size and is price momentum strong or weak by looking at the number of stocks that are in uptrends and downtrends.
The NDR/CMG process measures market breadth by analyzing the overall technical strength across 22 individually measured sub-industry sectors. The process measures the trend of each of the sub-industry sectors, evaluating the rate of change in price momentum over short-term and long-term time frames and directional trend of each sub-industry sector.
Click below to find out what this important indicator is telling us about current market breadth and whether we should be risk-on or risk-off.READ MORE
NASDAQ’s Jill Malandrino Interviews Steve Blumenthal
Last week, NASDAQ’s Global Market Reporter, Jill Malandrino, interviewed Steve Blumenthal at the Philadelphia Stock Exchange.
Steve discussed the Fed’s recent interest rate hike and its plans for additional increases this year. Steve urged caution, noting that 10 of the last 13 interest rate increase cycles have landed the US in recession. Click below for the full interview and potential moves investors can make to protect and preserve.
Recession Watch Indicators
Recently, we offered current U.S. recession watch charts, including the Employment Trends Index, the Economy and the S&P 500 Index, and Inverted Yield Curve.
It’s critically important to remain vigilant and to check these indicators regularly because the next great buying opportunity could be right around the corner.
The current recessions charts indicate…READ MORE
Equity Market Valuations and Probable Forward Returns
At which point do rising interest rates spark the fire? Rates are key to the equation of risk. In Friday’s On My Radar, Steve surveys what the current equity market valuations tell us about risk… and likely forward returns. Should you be playing more offense than defense or more defense than offense? Valuations can help.READ MORE
Blumenthal’s 2018 Market Outlook
In Friday’s On My Radar, Steve provides his much-anticipated market outlook for 2018.
Steve says, “The weight of market trend evidence remains bullish. I remain focused on both market momentum and trend evidence. Despite the aged, overvalued and over-bullish environment, as evidenced in Trade Signals each week, I remain moderately bullish on both equities and fixed income.”READ MORE
Blumenthal Interviewed by Nasdaq
On Friday, December 15, CMG Founder and CIO Steve Blumenthal was interviewed by Nasdaq global markets reporter Jill Maladrino. Jill asked Steve about the current state of the market, his 2018 outlook and his recent On My Radar piece called “Start Small, Grow Tall.”
Click below to watch the short interview.
Monthly Valuation Update
Every month, Steve reviews several market valuation metrics in an effort to provide visibility into forward 7-, 10-, and 12-year returns. In this week’s On My Radar, Steve looks at Median P/E and also shares GMO’s 7-Year Asset Class Real Return Forecasts. It’s a must-read!READ MORE
Monthly Valuation Review
Every month, Steve reviews several market valuation metrics in an effort to provide visibility into forward 7- and 10-year returns. In this week’s On My Radar, Steve looks at Median P/E and Warren Buffett’s favorite measure, Total Stock Market Cap to Gross Domestic Product. Additionally, Steve shares GMO’s 7-Year Asset Class Real Return Forecasts. It’s a must-read!READ MORE
Charts of the Week
My favorite trend following indicator is something we co-created with Ned Davis Research. It looks at the underlying trends in 22 industry sectors and scores the weight of evidence on a 0 to 100 scale. Here is the chart if you haven’t seen it before (note: I post it every Wednesday afternoon in Trade Signals). The trend for equities is currently bullish.
What about bond exposure? We monitor the Zweig Bond Model.
Please refer to the March 10, 2017 post of On My Radar for an explanation of how it works.
Finally, I believe the key to investing and perhaps the most important lesson to learn is how money compounds over time. To that end, I wrote a piece called the “Merciless Mathematics of Loss.” Next is the chart and you can find the full piece here.