iM Update – December 31, 2015

Market Signals Summary:

The MAC-US model generated a buy signal early November, thus the model is invested in the markets, however it may generate a sell within the next two  weeks,  The 3-mo Hi-Lo Index of the S&P500 signaled an exit from the stock the markets on 12/17/2015.  The MAC-AU remains out of the markets.  The recession indicators COMP and iM-BCIg do not signal a recession.  The bond market model avoids high beta (long) bonds, the trend of the yield spread is indeterminate. Both the gold and silver model are invested.

 

Stock-markets:

Fig-2.-1-1-2016The MAC-US model generated a buy-signal early November. The sell-spread is lower than last weeks level.   A simulation using the past two weeks prices shows that the model generates a sell within two weeks.

 

 

Fig-2.2-1-1-2016The 3-mo Hi-Lo Index of the S&P500 signaled an exit from the stock  markets on 12/17/2015 as the 40-day moving average (MA40) moved  below the 5% threshold. The  MA40 continues to decline.

 

 

Fig-2.1-1-1-2016The MAC-AU model generated a sell signal end of August and thus in cash. The buy-spread is higher than last week’s level. The next buy signal will emerge once the buy spread (green graph) moves above the zero line.

This model and its application is described in MAC-Australia: A Moving Average Crossover System for Superannuation Asset Allocations.

 

Recession:

Fig-3.-1-1-2016Figure 3 shows the COMP  is higher than  last week’s level, and far away from signaling recession.    COMP can be used for stock market exit timing as discussed in this article The Use of Recession Indicators in Stock Market Timing.

 

 

Fig-3.1-1-1-2016Figure 3.1 shows the recession indicator iM-BCIg lower than last week’s level. An imminent recession is not signaled .

Please also refer to the BCI page

 

 

Fig-3.2-1-1-2016The Forward Rate Ratio between the 2-year and 10-year U.S. Treasury yields (FRR2-10) is below last week’s level and far away from signalling a recession.

A description of this indicator can be found here.

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