ECRI 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 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.
The 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:
Figure 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.