iM Update December 12, 2014

Market Signals Summary:

The IBH stock market model is out of the market. The MAC stock market model is invested, The recession indicator COMP is up from last week’s revised level, and iM-BCIg is downfrom last week’s level. MAC-AU is out of the market. The bond market model avoids high beta (long) bonds, the yield curve has steepening trend, both the gold and silver model are invested.

 

Stock-markets:

The IBH-model is out of the market as shown in Fig. 1. A Sell A signal was generated 24 weeks ago. The IBH-model is described here and the latest rules can be found here .

 

 

The MAC-US model stays invested. MAC-US Fig 2 shows the spreads of the moving averages. The sell-spread is up from last week’s level. 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 is out of the market, although it may be very close to a sell signal. A sell signal was generated on Nov-25. The model switched to interest bearing instruments. MAC-AU Fig 2.1 shows the spreads of the moving averages of the Australia All Ordinaries Index. The sell-spread is lower than last week’s level. The sell spread (red graph) has moved below the zero line for a sell signal. A buy signal will only be generated when the buy-spread (green graph) moves from below to above zero

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

 

Recession:

In Fig. 3 one can see that COMP is higher from last week’s level, and far away from signaling recession. 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 shows our recession indicator iM-BCIg, is downfrom last week’s revised level. A recession is not imminent as one can clearly see.

Please also refer to the BCI page