There are no major changes this week; though, daily investor sentiment is nearing Extreme Optimism. The cyclical trend for U.S. equities remains bullish. With valuations high (and they could go higher), risk remains high. Hedge any equity exposure.
The Zweig Bond Model remains in a buy signal, suggesting longer-term high-quality bond ETF exposure. High yield remains in a buy signal. Gold remains in a cyclical bull market uptrend.
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 Optimism (short-term Bearish 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
Tactical — CMG Opportunistic All Asset Strategy (update):
Relative Strength Leadership Trends: Current holdings are reflected above. We see more defensive-oriented ETFs showing the strongest relative price strength.
The Strategy is a relative strength-driven process that evaluates approximately 100 different ETFs, including large-caps, mid-caps, small-caps, value and growth, sectors, various fixed income, international and emerging markets. The objective is a diversified portfolio that invests in the ETFs mathematically demonstrating strong market leadership.
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.