iM Update – April 1, 2016

Market Signals Summary:

The MAC-US model  is out of the market.  However, both the “3-mo Hi-Lo Index of the S&P500” and the “VMNFX vs. SPY Timer” are invested in the markets.   The MAC-AU is also invested.  The recession indicators COMP and iM-BCIg do not signal a recession.  The bond market model avoids high beta (long) bonds, the trend of the yield spread is declining. The gold and the silver model are invested.



Fig-2.-4-1-2016The MAC-US model generated a sell-signal early January and is not invested in the stock-markets. The buy-spread is up from last week’s level and simulations show that it may generate a buy signal early next week. The next buy signal will emerge once the buy-spread (green graph) moves above the zero line.



Fig-2.2-4-1-2016The 3-mo Hi-Lo Index of the S&P500 is invested in the market, it generated a buy signal  on 3/23/2016.  



Fig-2.3-4-1-2016The VMNFX vs. SPY Timer  signaled an entry into the stock  markets on 3/28/2016. For this model to exit the markets the indicator has to fall below the 2% trigger line and then rise above it.



Fig-2.1-4-1-2016The MAC-AU model is invested in the markets after it generated a buy signal on March 21, 2016. The sell-spread, still negative, is higher than last week’s level, but first has to become positive before it can signal a sell.

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



Fig-3.-4-1-2016Figure 3 shows the COMP  is up from  last week’s revised level. No recession is indicated.    COMP can be used for stock market exit timing as discussed in this article The Use of Recession Indicators in Stock Market Timing.



Fig-3.1-4-1-2016Figure 3.1 shows the recession indicator iM-BCIg also up from last week’s revised level. An imminent recession is not signaled .

Please also refer to the BCI page



Fig-3.2-4-1-2016The Forward Rate Ratio between the 2-year and 10-year U.S. Treasury yields (FRR2-10) is near last week’s level and far away from signalling a recession.

A description of this indicator can be found here.

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