Stock-market:
ECRI reported the WLI at a level of 130.2 and the six months smoothed annualized growth WLIg at +8.9%, both numbers are higher from last week, as shown in Fig 2. One can see that the indicator graphs have a generally upward direction now which is usually the pattern for an upward bound market. The model is invested in the S&P500.
MAC Fig 3 shows the spreads of the moving averages, both having increased from last week. The sell spread (red graph) has moved further away from crossing the zero line, and a sell signal will not be generated in the near future. The model stays invested.
Bond-market:
The Bond Value Ratio is shown in Fig 7. The BVR was not much different from last week but the trend is downwards. In the longer term BVR will reach the long-term trendline and long-bond investors will have suffered considerable losses by then. The model avoids high beta bonds.
The Yield Curve:
Figure 5 charts (i10 – i2). The trend is up now as one can clearly see – 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. This model confirms the direction of the BVR.
Recession:
Attached is the updated COMP which is at a similar level as last week. This model is updated weekly with the new and revised data of its components and does not necessarily exactly reflect last week’s reported level now. This indicator is far away from a recession signal.
Gold:
The updated modified Coppock indicator for gold is shown in figure 4. It has not formed a trough yet, and no buy signal so far, but the year-over-year rolling return percentage change expressed in standard deviation terms seems to indicate an oversold condition. Gold would have to make a sustained move to $1700 and higher over the next few weeks for a buy signal, which could then appear earliest at the end of March, according to my projections.
This indicator is described in Is it Time to Buy Gold Again? – Wait for the buy signal …