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August 25, 2013 – The iM-Best(SPY-SH) model continues to hold SPY (Updated Sundays)
August 27, 2013 (Updated Tuesdays using Monday’s closing prices.)
A starting capital of $100,000 at inception of 1/2/2009 would have grown to $326,825 which includes $137 cash and excludes $4,217 spent on fees and slippage.
August 29, 2013 (Updated Thursdays)
Business Cycle Index:
These movements are normal in the business cycle and no imminent recession is indicated.
August 30, 2013 (Updated Fridays)
Market Signals Summary:
The IBH stock market model is out of the market. The MAC stock market model is invested, the bond market model avoids high beta (long) bonds, the yield curve is steepening, the gold model is not invested, but the silver model is invested. The recession indicator COMP is a bit higher and iM-BCIg is lower from last week’s level. MAC-AU is also invested.
The IBH-model is out of the market as shown in Fig. 1. A sell signal was generated 24 weeks ago when the WLIg_shortEMA moved below the WLIg_longEMA. Currently the WLIg_shortEMA indicator is just below WLIg_longEMA. If the sell signal was correct then WLIg_shortEMA should move decisively below WLIg_longEMA, which is currently not the case.
The MAC-US model stays invested. MAC-US Fig 2 shows the spreads of the moving averages. The sell-spread is slightly lower from last week’s level, but the buy-spread is a lot lower. It looks as if both spreads have peaked. A sell signals is not imminent. The sell spread (red graph) has to move below the zero line for a sell signal.
The MAC-AU model stays invested. MAC-AU Fig 2.1 shows the spreads of the moving averages of the Australia All Ordinaries Index. The sell-spread and the buy-spread are higher from last week’s level. It appears as if the market is moving sideways. The sell spread (red graph) has to move below the zero line for a sell signal.
This model and its application is described in MAC-Australia: A Moving Average Crossover System for Superannuation Asset Allocations
The BVR-model avoids high beta bonds (long-bonds) and also intermediate duration bonds.
The Bond Value Ratio is shown in Fig 3. The BVR is a bit higher than last week’s level, but the overall trend is downwards. It is possible that bond yields may go lower for a while, reflected by BVR moving higher, but the trend of BVR is lower. Only when BVR turns upward after having been lower than the lower offset-line should one consider long bonds again. In the meantime we can expect bonds to lose more value for some time still.
The Yield Curve:
The yield curve model shows the steepening trend of the 10-year and 2-year Treasuries yield spread. There is not a big change from last week. Figure 4 charts (i10 – i2). The trend is up, as one can see. FLAT and STPP are ETNs. STPP profits from a steepening yield curve and FLAT increases in value when the yield curve flattens. This model confirms the direction of the BVR.
COMP can be used for stock market exit timing as discussed in this article The Use of Recession Indicators in Stock Market Timing.
Please also refer to the BCI page
There is no buy-signal from the modified Coppock Gold indicator shown in Fig 6. This model has been out of Gold since Nov-26-2012. Gold moved higher over the last 9 weeks as anticipated.
This indicator is described in Is it Time to Buy Gold Again? – Wait for the buy signal ……. Please also view the technical gold chart from a recent article in Morningstar-Australia.
This indicator is described in Silver – Better Than Gold: A Modified Coppock Indicator for Silver. Please also view the technical silver chart from a recent article in Morningstar-Australia.
August 2, 2013 (Updated first Friday of the Month)
Based on the historic patterns of the unemployment rate indicators prior to recessions one can reasonably conclude that the U.S. economy is currently not close to a recession. The indicator pattern is consistent with those from prior in-between recession periods.
Modified S&P500 Coppock
The modified Coppock indicator for the S&P500 has signaled a continuous stock market investment now from May-22-09 onwards only interrupted for three weeks from April-23 to May-14-10. This indicator can only provide buy signals and stays invested until the S&P has gained 38% or for 48 weeks after a buy signal, whichever comes first. If a new buy signal is generated during an investment period, then these criteria apply again from then onwards.
This model will stay invested at least to the end of this year.