iM Update – May 19, 2017

Market Signals Summary:

The MAC-US model is invested. 

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The MAC-AU is also invested.  The recession indicators COMP and iM-BCIg do not signal a recession. 

 

Stock-markets:

Fig-2.-5-19-2017The MAC-US model generated a buy-signal 4/5/2016 and thus is invested in the stock-markets. The sell-spread (red graph) is below last week’s level and has to fall below zero to signal a sell.

 

 

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Fig-2.1-5-19-2017The MAC-AU model is invested in the markets after it generated a buy signal on March 21, 2016. The sell-spread is near last week’s level and has to fall below zero to signal a sell.

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

 

Recession:

Fig-3.-5-19-2017Figure 3 shows the COMP below last week’s  revised  level. No recession is indicated.    COMP can be used for stock market exit timing as discussed in this article The Use of Recession Indicators in Stock Market Timing.

 

 

Fig-3.1-5-19-2017Figure 3.1 shows the recession indicator iM-BCIg which is up from last week’s level. An imminent recession is not signaled .

Please also refer to the BCI page

 

 

Fig-3.2-5-19-2017The Forward Rate Ratio between the 2-year and 10-year U.S. Treasury yields (FRR2-10) is below previous week’s level and far away from signalling a recession. A downward trend of the FRR2-10 seems to have set in again.

A description of this indicator can be found here.

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