Bonds, utilities and gold show the strongest relative price strength. On the equity front, investor sentiment remains extremely pessimistic, which is short-term bullish for equities.
You’ll find the most recent valuation updates in this Friday’s “On My Radar.” Corporate profits have been weak six quarters in a row, yet the S&P 500 Index remains about 2.5% from its all-time high of 2136. Median P/E remains above 23. I’d feel a lot better about the equity market if the market were not so expensively priced. In my view, risk remains high.
Following are the most recent Trade Signals:
Equity Trade Signals (Green is Bullish, Orange is Neutral and Red is Bearish):
- CMG Ned Davis Research (NDR) Large Cap Momentum Index: Sell Signal – Bearish for Equities. (Last signal on June 30, 2015, S&P 500 Index level 2063.11)
- Long-term Trend (13/34-Week EMA) on the S&P 500 Index: Buy Signal – Bullish Cyclical Trend for Equities
- Volume Supply (selling) is greater than Volume Demand (buying): Buy Signal – ST Bullish for Equities
- NDR Big Mo: See note below (active signal: Buy signal on March 4, 2016 at 1999.99)
- Don’t Fight the Tape or the Fed: Indicator Reading = +1 (Bullish for Equities)
Investor Sentiment Indicators:
- NDR Crowd Sentiment Poll: Neutral Optimism (short-term Bullish for Equities)
- Daily Trading Sentiment Composite: Extreme Pessimism (short-term Bullish for Equities)
Fixed Income Trade Signals:
- Zweig Bond Model: Buy Signal
- CMG Managed High Yield Bond Program: Buy Signal
- Global Recession Watch Indicator – High Global Recession Risk
- U.S. Recession Watch Indicator – Low U.S. Recession Risk
- 13-week vs. 34-week exponential moving average: Buy Signal – Bullish for Gold
By Steve Blumenthal | For the rest of the story see Trade Signals: A Great First Half for Long Duration Bonds and High Yield
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.