iM Update – Feb 7, 2014

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 lower from last week’s level, and iM-BCIg is also lower from last week’s revised level.  MAC-AU is invested.

 

Stock-markets:

The IBH-model is out of the market as shown in Fig. 1.  A sell signal was generated 47 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.  However, had it not been for this sell signal, the model would have generated another sell signal on Sep-20-13.  A Sell-C signal was generated on during week ending 11/15/13. 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 lower from last week’s level and appears to have rolled over.  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 is lower from last week’s level and appears to be poised to move lower.  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.

 

Recession:

 

In Fig. 5 one can see that COMP is lower from last week’s level, but 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. 5.1 shows our recession indicator iM-BCIg, lower from last week’s revised level. It is possible that BCIg may have peaked in June. A recession is not imminent as one can clearly see.

Please also refer to the BCI page