You’ll also see that the trend data as measured by a weekly moving average has recently turned bullish on equities. Daily investor sentiment remains far too optimistic which is short-term bearish for equities. Overall the evidence is mixed, the market is expensively priced though seasonal tendencies are positive. Sentiment is mixed, however, short-term sentiment is far too optimistic (which tends to be ST bearish for equities). Ten-year forward returns probabilities are low (predicting 2% and 4%) for equities and yields on bonds remain ultra-low – not the right recipe for the 60/40 (stock/bond) investors looking to gain 8%.
My two cents: Broadly diversify, hedge equity exposure and overweight liquid alternatives (defined as anything other than traditional buy-and-hold stocks and bonds).
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.