The long-term models, CMG Ned Davis Research (NDR) Large Cap Momentum Index and 13/34-Week EMA, inform our long-term market outlook. The primary trend remains negative. The long-term signals guide our cautious view on the market. Hedge equity exposure and raise some cash on rallies.
Mohamed El-Erian is suggesting 25% in cash. I’m not suggesting that much, but we should take note of his reasoning. I favor using our CMG NDR Large Cap Momentum Index to have a systematic process in place that does it for us.