Update 12-28-12


Fig 2  -  2009-12 updated 12-28-12 - page1ECRI reported the WLI at a level of 128.3 and the six months smoothed annualized growth WLIg at +5.4%, as shown in Fig 2. Six weeks ago the IBH model generated a sell-basic signal and 2 days later a sell A signal, indicating that the model had exited the S&P500. So far the S&P has gained since the sell signal.

MAC Fig 3 updated 12-28-12 - page1MAC Fig 3 shows the spreads of the moving averages. The sell spread (red graph) may be in the early stage of forming a trough. No sell signal has so far been generated from this model. The model stays invested.



Fig7  BVR06-12 updated 12-28-12 - page1The Bond Value Ratio is shown in Fig 7. The BVR has been flat lately. In the longer term BVR will reach the long-term trendline and long-bond investors will have suffered considerable losses by then. The model stays invested in low beta bonds.


The Yield Curve:

Fig5 FLAT & STPP 12-28-12 - page1Figure 5 charts (i10 – i2). The trend seems to be up – the model expects the yield curve to steepen. FLAT and STPP are ETNs. STPP profits from a steepening yield curve and FLAT increases in value when the yield curve flattens.



COMP 12-28-12 - page1Attached is the updated COMP which gained further since last week and the trajectory is upwards. This indicator is far away from a recession signal.

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