Market Insight

TrendFlex Score & TrendFlex Signals for 4/13/2018

 

TrendFlex Credit Risk Premium Signals (CR)

The short term TrendFlex Classic signal shifted to long on 4/5. The longer term Allegiance signal remains long.  Click here for a primer on the TrendFlex Score and TrendFlex Signals.

TrendFlex Signal Trend  Date  Return

S&P 500  Return

S&P 500 timing signals based on credit risk (CR) premiums (corporate vs.Treasury debt). 
TrendFlex Classic CR Long 4/05/2018 -0.20% -0.20%
TrendFlex Allegiance CR Long 3/26/2018 -0.10% -0.10%
Historic Performance        

 TrendFlex Score

The TrendFlex Score is at 1.87 and remains below its three-week moving average, a bullish development. 

 TFS04132018

   TrendFlex Trend Following Signals (TF)

The TrendFlex Classic TF remains bearish, while Allegiance remains in uptrend.    

TrendFlex Signal Trend  Date  Return

S&P 500  Return

Score

S&P 500 timing signals based on a weighted score of US Market technical indicators. Classic (short-term) and Allegiance (intermediate to long term).  Score:  Bullish = 1.0-1.75; Neutral = 1.75-2.25; Bearish = 2.25-3.0

TrendFlex Classic TF Bearish 2/5/18

-.30%

+.30% 2.600
TrendFlex Allegiance TF Uptrend 5/31/16 26.50% 26.50% 1.375
Historic Performance          

 Baseline Analytics Extremes Indicators

Baseline Analytics Extremes highlights four key TrendFlex Indicators and their level of extreme readings.  The key indicators include the following:

  1. CBOE VIX and Put/Call Ratio
  2. Moving Average Cross Momentum Signals
  3. LQD vs. S&P 500 GAP reading

When one or more of these indicators has reached an extreme reading, chart and commentary will follow. There are no extremes this week.  

 

 Portfolio Strategy Table

The Portfolio Strategies chart remains bullish, with an edge toward risk-aversion.   

Portfolio Strategies*
Reduce Longs
 Sell Calls
 Hedge Longs
Set Stops on Longs
Short Overbought Equities
 Add to Longs
Sell Puts
Hedge or Reduce Shorts
 Long Futures and Options

 *Red highlighted items are recommended strategies

 

Continue reading
14 Hits

TrendFlex Score & TrendFlex Signals for 3/30/2018

Next Update 4/13 market close

 

TrendFlex Credit Risk Premium Signals (CR)

The short term TrendFlex Classic signal remains short.. The longer term Allegiance signal shifted back to a long position on 3/26.  Click here for a primer on the TrendFlex Score and TrendFlex Signals.

TrendFlex Signal Trend  Date  Return

S&P 500  Return

S&P 500 timing signals based on credit risk (CR) premiums (corporate vs.Treasury debt). 
TrendFlex Classic CR Short 2/20/2018 +2.90% -2.80%
TrendFlex Allegiance CR Long 3/26/2018 -0.70% -0.70%
Historic Performance        

 TrendFlex Score

The TrendFlex Score remained flat at 1.97 and remains above its three-week moving average, a bearish development but nearing an extreme where a bullish bounce may occur.

 TFS03302018

   TrendFlex Trend Following Signals (TF)

The TrendFlex Classic TF remains bearish, while Allegiance remains in uptrend.    

TrendFlex Signal Trend  Date  Return

S&P 500  Return

Score

S&P 500 timing signals based on a weighted score of US Market technical indicators. Classic (short-term) and Allegiance (intermediate to long term).  Score:  Bullish = 1.0-1.75; Neutral = 1.75-2.25; Bearish = 2.25-3.0

TrendFlex Classic TF Bearish 2/5/18

+.30%

-.30% 2.800
TrendFlex Allegiance TF Uptrend 5/31/16 25.70% 25.70% 1.625
Historic Performance          

 Baseline Analytics Extremes Indicators

Baseline Analytics Extremes highlights four key TrendFlex Indicators and their level of extreme readings.  The key indicators include the following:

  1. CBOE VIX and Put/Call Ratio
  2. Moving Average Cross Momentum Signals
  3. LQD vs. S&P 500 GAP reading

When one or more of these indicators has reached an extreme reading, chart and commentary will follow. There are no extremes this week.  

 

 Portfolio Strategy Table

The Portfolio Strategies chart remains bullish, with an edge toward risk-aversion.   

Portfolio Strategies*
Reduce Longs
 Sell Calls
 Hedge Longs
Set Stops on Longs
Short Overbought Equities
 Add to Longs
Sell Puts
Hedge or Reduce Shorts
 Long Futures and Options

 *Red highlighted items are recommended strategies

 

Continue reading
48 Hits

TrendFlex Score & TrendFlex Signals for 3/23/2018

TrendFlex Credit Risk Premium Signals (CR)

The short term TrendFlex Classic signal remains short.. The longer term Allegiance signal shifted to a short position also, that date is marked at the market close of 3/14.  Click here for a primer on the TrendFlex Score and TrendFlex Signals.

TrendFlex Signal Trend  Date  Return

S&P 500  Return

S&P 500 timing signals based on credit risk (CR) premiums (corporate vs.Treasury debt). 
TrendFlex Classic CR Short 2/20/2018 +4.90% -4.70%
TrendFlex Allegiance CR Short 3/14/2018 +6.10% -5.70%
Historic Performance        

 TrendFlex Score

The TrendFlex Score increased  from 1.67 to 1.91 and closed above its three-week moving average, a bearish development.    

TFS03232018

 

   TrendFlex Trend Following Signals (TF)

The TrendFlex Classic TF remains bearish, while Allegiance remains in uptrend.    

TrendFlex Signal Trend  Date  Return

S&P 500  Return

Score

S&P 500 timing signals based on a weighted score of US Market technical indicators. Classic (short-term) and Allegiance (intermediate to long term).  Score:  Bullish = 1.0-1.75; Neutral = 1.75-2.25; Bearish = 2.25-3.0

TrendFlex Classic TF Bearish 2/5/18

+2.30%

-2.30% 2.400
TrendFlex Allegiance TF Uptrend 5/31/16 23.20% 23.20% 1.625
Historic Performance          

 Baseline Analytics Extremes Indicators

Baseline Analytics Extremes highlights four key TrendFlex Indicators and their level of extreme readings.  The key indicators include the following:

  1. CBOE VIX and Put/Call Ratio
  2. Moving Average Cross Momentum Signals
  3. LQD vs. S&P 500 GAP reading

When one or more of these indicators has reached an extreme reading, chart and commentary will follow. The VIX indicator remains at an extreme (especially the Put/Call ratio). The LQD indicator is also at an extreme that in the past has marked short-term bottoms in equities. 

vix03232018  

 

lqd03232018

 

 Portfolio Strategy Table

The Portfolio Strategies chart remains bullish, with an edge toward risk-aversion.   

Portfolio Strategies*
Reduce Longs
 Sell Calls
 Hedge Longs
Set Stops on Longs
Short Overbought Equities
 Add to Longs
Sell Puts
Hedge or Reduce Shorts
 Long Futures and Options

 *Red highlighted items are recommended strategies

 

Continue reading
70 Hits

TrendFlex Score & TrendFlex Signals for 3/16/2018

 Next update will be week ending 3/16.

TrendFlex Credit Risk Premium Signals (CR)

The short term TrendFlex Classic signal remains short..  The longer term Allegiance signal remains long.  Click here for a primer on the TrendFlex Score and TrendFlex Signals.

TrendFlex Signal Trend  Date  Return

S&P 500  Return

S&P 500 timing signals based on credit risk (CR) premiums (corporate vs.Treasury debt). 
TrendFlex Classic CR Short 2/20/2018 -1.30% +1.30%
TrendFlex Allegiance CR Long 4/13/16 +36.30% +36.30%
Historic Performance        

 TrendFlex Score

The TrendFlex Score decreased  from 1.87 to 1.69 and closed below its three-week moving average, a bullish development.    

TFS03162018

 

   TrendFlex Trend Following Signals (TF)

The TrendFlex Classic TF remains bearish, while Allegiance remains in uptrend.    

TrendFlex Signal Trend  Date  Return

S&P 500  Return

Score

S&P 500 timing signals based on a weighted score of US Market technical indicators. Classic (short-term) and Allegiance (intermediate to long term).  Score:  Bullish = 1.0-1.75; Neutral = 1.75-2.25; Bearish = 2.25-3.0

TrendFlex Classic TF Bearish 2/5/18

-3.70%

+3.90% 2.300
TrendFlex Allegiance TF Uptrend 5/31/16 31.0% 31.0% 1.625
Historic Performance          

 Baseline Analytics Extremes Indicators

Baseline Analytics Extremes highlights four key TrendFlex Indicators and their level of extreme readings.  The key indicators include the following:

  1. CBOE VIX and Put/Call Ratio
  2. Moving Average Cross Momentum Signals
  3. LQD vs. S&P 500 GAP reading

When one or more of these indicators has reached an extreme reading, chart and commentary will follow. The VIX indicator remains at an extreme. The LQD indicator is also at an extreme that in the past has marked short-term bottoms in equities.  There are no extreme readings following thie week's market close.   

 

 Portfolio Strategy Table

The Portfolio Strategies chart remains bullish, with an edge toward risk-aversion.   

Portfolio Strategies*
Reduce Longs
 Sell Calls
 Hedge Longs
Set Stops on Longs
Short Overbought Equities
 Add to Longs
Sell Puts
Hedge or Reduce Shorts
 Long Futures and Options

 *Red highlighted items are recommended strategies

 

Continue reading
70 Hits

TrendFlex Score & TrendFlex Signals for 3/2/2018

 Next update will be week ending 3/16.

TrendFlex Credit Risk Premium Signals (CR)

The short term TrendFlex Classic signal shifted to short at the 2/20 market close.  The longer term Allegiance signal remains long.  Click here for a primer on the TrendFlex Score and TrendFlex Signals.

TrendFlex Signal Trend  Date  Return

S&P 500  Return

S&P 500 timing signals based on credit risk (CR) premiums (corporate vs.Treasury debt). 
TrendFlex Classic CR Short 2/20/2018 +0.90% -0.90%
TrendFlex Allegiance CR Long 4/13/16 +33.30% +33.30%
Historic Performance        

 TrendFlex Score

The TrendFlex Score increased to 1.87 from 1.71 and closed above its three-week moving average.    

TFS03022018

 

   TrendFlex Trend Following Signals (TF)

The TrendFlex Classic TF remains bearish, while Allegiance remains in uptrend.    

TrendFlex Signal Trend  Date  Return

S&P 500  Return

Score

S&P 500 timing signals based on a weighted score of US Market technical indicators. Classic (short-term) and Allegiance (intermediate to long term).  Score:  Bullish = 1.0-1.75; Neutral = 1.75-2.25; Bearish = 2.25-3.0

TrendFlex Classic TF Bearish 2/5/18

-1.60%

+1.60% 2.500
TrendFlex Allegiance TF Uptrend 5/31/16 28.10% 28.10% 1.625
Historic Performance          

 Baseline Analytics Extremes Indicators

Baseline Analytics Extremes highlights four key TrendFlex Indicators and their level of extreme readings.  The key indicators include the following:

  1. CBOE VIX and Put/Call Ratio
  2. Moving Average Cross Momentum Signals
  3. LQD vs. S&P 500 GAP reading

When one or more of these indicators has reached an extreme reading, chart and commentary will follow. The VIX indicator remains at an extreme. The LQD indicator is also at an extreme that in the past has marked short-term bottoms in equities.  There are no extreme readings following thie week's market close. 

 

 

 

 Portfolio Strategy Table

The Portfolio Strategies chart remains bullish, with an edge toward risk-aversion.   

Portfolio Strategies*
Reduce Longs
 Sell Calls
 Hedge Longs
Set Stops on Longs
Short Overbought Equities
 Add to Longs
Sell Puts
Hedge or Reduce Shorts
 Long Futures and Options

 *Red highlighted items are recommended strategies

 

Continue reading
134 Hits

TrendFlex Score & TrendFlex Signals for 2/23/2018

 

TrendFlex Credit Risk Premium Signals (CR)

The short term TrendFlex Classic signal shifted to short at the 2/20 market close.  The longer term Allegiance signal remains long.  Click here for a primer on the TrendFlex Score and TrendFlex Signals.

TrendFlex Signal Trend  Date  Return

S&P 500  Return

S&P 500 timing signals based on credit risk (CR) premiums (corporate vs.Treasury debt). 
TrendFlex Classic CR Short 2/20/2018 -1.10% +1.10%
TrendFlex Allegiance CR Long 4/13/16 +36.10% +36.10%
Historic Performance        

 TrendFlex Score

The TrendFlex Score decreased from 1.74 to 1.71 and closed below its three-week moving average.    

TFS02232018

 

   TrendFlex Trend Following Signals (TF)

The TrendFlex Classic TF remains bearish, while Allegiance remains in uptrend.    

TrendFlex Signal Trend  Date  Return

S&P 500  Return

Score

S&P 500 timing signals based on a weighted score of US Market technical indicators. Classic (short-term) and Allegiance (intermediate to long term).  Score:  Bullish = 1.0-1.75; Neutral = 1.75-2.25; Bearish = 2.25-3.0

TrendFlex Classic TF Bearish 2/5/18

-3.60%

+3.70% 2.500
TrendFlex Allegiance TF Uptrend 5/31/16 30.80% 30.80% 1.375
Historic Performance          

 Baseline Analytics Extremes Indicators

Baseline Analytics Extremes highlights four key TrendFlex Indicators and their level of extreme readings.  The key indicators include the following:

  1. CBOE VIX and Put/Call Ratio
  2. Moving Average Cross Momentum Signals
  3. LQD vs. S&P 500 GAP reading

When one or more of these indicators has reached an extreme reading, chart and commentary will follow. The VIX indicator remains at an extreme. The LQD indicator is also at an extreme that in the past has marked short-term bottoms in equities.  There are no extreme readings following thie week's market close. 

 

 

 

 Portfolio Strategy Table

The Portfolio Strategies chart remains bullish, with an edge toward risk-aversion.   

Portfolio Strategies*
Reduce Longs
 Sell Calls
 Hedge Longs
Set Stops on Longs
Short Overbought Equities
 Add to Longs
Sell Puts
Hedge or Reduce Shorts
 Long Futures and Options

 *Red highlighted items are recommended strategies

 

Continue reading
127 Hits

TrendFlex Score & TrendFlex Signals for 2/16/2018

 

TrendFlex Credit Risk Premium Signals (CR)

The short term TrendFlex Classic signal shifted to long at the 2/15 market close.  The longer term Allegiance signal remains long.  Click here for a primer on the TrendFlex Score and TrendFlex Signals.

TrendFlex Signal Trend  Date  Return

S&P 500  Return

S&P 500 timing signals based on credit risk (CR) premiums (corporate vs.Treasury debt). 
TrendFlex Classic CR Long 2/15/18 0.00% +0.00%
TrendFlex Allegiance CR Long 4/13/16 +35.30% +35.30%
Historic Performance        

 TrendFlex Score

The TrendFlex Score decreased from 1.87 to 1.74 and remains above its three-week moving average.    

TFS02162018

 

   TrendFlex Trend Following Signals (TF)

The TrendFlex Classic TF shifted to bearish at the 2/5 market close, while Allegiance remains in uptrend.    

TrendFlex Signal Trend  Date  Return

S&P 500  Return

Score

S&P 500 timing signals based on a weighted score of US Market technical indicators. Classic (short-term) and Allegiance (intermediate to long term).  Score:  Bullish = 1.0-1.75; Neutral = 1.75-2.25; Bearish = 2.25-3.0

TrendFlex Classic TF Bearish 2/5/18

-3.00%

+3.10% 2.500
TrendFlex Allegiance TF Uptrend 5/31/16 30.10% 30.10% 1.375
Historic Performance          

 Baseline Analytics Extremes Indicators

Baseline Analytics Extremes highlights four key TrendFlex Indicators and their level of extreme readings.  The key indicators include the following:

  1. CBOE VIX and Put/Call Ratio
  2. Moving Average Cross Momentum Signals
  3. LQD vs. S&P 500 GAP reading

When one or more of these indicators has reached an extreme reading, chart and commentary will follow. The VIX indicator remains at an extreme. The LQD indicator is also at an extreme that in the past has marked short-term bottoms in equities.  There are no extreme readings following thie week's market close. 

 

 

 

 Portfolio Strategy Table

The Portfolio Strategies chart remains bullish, with an edge toward risk-aversion.   

Portfolio Strategies*
Reduce Longs
 Sell Calls
 Hedge Longs
Set Stops on Longs
Short Overbought Equities
 Add to Longs
Sell Puts
Hedge or Reduce Shorts
 Long Futures and Options

 *Red highlighted items are recommended strategies

 

Continue reading
153 Hits

LQD Gap Indicator Supports Hedging Long Stock Positions

Our gap indicator showing the divergence between a ratio of LQD/SPX and its moving average, has expanded further below the moving average line.  See the chart below.

LQD010318

Such gaps tend to proceed a bit of profit taking in the S&P 500 (see the red dotted lines).  Interesting to note also the green dotted lines, whereby the gap is recovered (or there is a gap ABOVE the moving average), signaling a good time to be long.

Today's reading suggests that hedging long positions is in order.

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279 Hits

Unwinding of Tech (and Re-winding of Financials)

Today there was quite a reversal in financial stocks at the "expense" of technology.  The chart below plots a ratio of the XLF Finance SPDR vs. the XLK Technology SPDR.  Note today's surge:

xlfxlk

What is interesting is the "fits and starts" seen over the plotted timeframe since April.  This leads us to assess that what we saw today was merely a reversion to the mean for tech, and a resumption of the uptrend (along with the broader market) for financials.

Note the smaller charts below: XLK (Tech) is settling near its 50-day moving average (not there yet so some more potential downside in store). Financials (XLF), with their strong surge moves their index back to the "up" trendline.

So in our view, just a bit of sector rotation unwiding the excesses we have seen in tech, with laggard financials catching up.  

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272 Hits

Thinking About the Yield Curve

Baseline Analytics checks in on a monthly basis the status of the yield curve as displayed on StockCharts.com.  StockCharts does a great job showing the yield curve dynamically, correlating it with the price of the S&P 500 since the late 1990's.  

Here's a snapshot.  You can run the dynamic activity by visiting this link.

dyc

Marc chandler wrote this interesting blog as we think about the components of the yield curve and what it's up to. Click here to see Marc's blog.

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306 Hits

TrendFlex Classic CR Signal

True to recent whipsaw activity (modest market setbacks followed by continuation of the uptrend), the TrendFlex Classic CR signal crossed above its moving average (rather decisively) on 11/21.  See the chart below.

TFC11222017

A number of other indicators are flashing warnings (i.e. RSI for the S&P 500 is showing negative divergence). Caution still rules, however the TrendFlex Classic CR signal may reset following this week's market activity.

Diverge

 

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376 Hits

Small Cap Relative Strength Picks Up

Small Cap stocks have lagged in relative strength versus their larger-cap brethren. Recently, however, improved market breadth has brought along a resurgence in small caps.

Note the improved relative strength in Small Cap Value (IJS) and the Russell 2000 (IWM) ETF's as a ration of the indices with the S&P 500.  Broader market participation of the small cap sector invites us to seek growth and value-oriented small cap opportunties.

 

IWM Snippet

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361 Hits

High Yield Bond Risk - Time for Defensive Strategies?

Investors have poured billions of dollars into Exchange-Traded Funds focused on high-yoeld securities. In this article, David Fabian of FMD Capital Management addresses the recent volatility in high yield bond ETF's and defensive strategies to protect capital.  Click here for David's article.

 

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301 Hits

TrendFlex CR Sell Signal Remains in Effect

Opportunity to hedge long positions continues.  The SELL signal for the S&P 500 established at the market close of November 9th has a positive return of +0.8%.  See the updated chart below:

TFCCR11152017

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339 Hits

Sell Signal TrendFlex Classic CR

At the market close of 11/8/2017, the TrendFlex Classic CR signal avoided a SELL despite an intraday dip into SELL territory.  Today, the indicator has once again turned bearish, as can be seen in the chart below.  We require a close below its moving average, so at this time the SELL signal is not a done deal, but we suspect it will be and have noted today's market close as a new SELL signal.

TFCCR11092017b

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335 Hits

Pending Sell Signal TrendFlex Classic CR

The TrendFlex Classic CR indicator is heading toward a sell signal.  It has been on a buy signal since 9/14/17.  Confirmation will be based on a close below its moving average (see red circle to the right on the chart below).

 

TFCCR11072017

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324 Hits

Low Volatility ETF's

There is a growing batch of US and global low-volatility ETF's - many of which sport decent dividend yields.  See this article by David Fabian of FMD Capital Management about the "Ins and Outs of Low Volatility ETF's."

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442 Hits

NYSE High/Low Ratio: Time for SPX to Take a Breather

In the chart below, see the section labeled "$NYHL."  The New York Stock Exchange High/Low Ratio shows peaks and troughs which correspond to peaks and troughs in the S&P 500.  The green lines are bullish equity signals, while the red are bearish.

This scenario portends hedging longs after this recent "melt up" in equity prices.

NYHL10062017

 

 

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473 Hits

LQD Gap Extreme Is Growing

One of our extreme indicators is the gap in our LQD/IEF ratio vs. its moving average.  The chart below suggests that this gap, which has preceded past declines in the S&P500, may be forewarning a setback in equities.

 

LQD09212017

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480 Hits

TrendFlex Signal Update - 8/17/17

The TrendFlex Classic CR remains in sell mode.  Next support for the S&P500 is 2425 with 2400 as major support.

TFCCR08172017

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444 Hits