iM Update – September 1, 2017

Market Signals Summary:

The MAC-US model is invested.  However, the “3-mo Hi-Lo Index of the S&P500” generated a sell signal on 8/22/2017 and is in cash. The monthly updated S&P500 Coppock indicator is also invested.  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, and the  yield curve trend is indeterminate. Both the gold and silver Coppock models are invested, and the iM-Gold Timer is in gold since 7/10/2017.

 

Stock-markets:

The MAC-US model generated a buy-signal 4/5/2016 and thus is invested in the stock-markets. The sell-spread (red graph) is below last week’s level and has to fall below zero to signal a sell.

 

 

The 3-mo Hi-Lo Index of the S&P500  is below last week’s level  at 4.50% (last week 4.62%) and is out of the market since 8/22/2017.

 

 

 

The MAC-AU model is invested in the markets after it generated a buy signal on March 21, 2016. The sell-spread is below last week’s level and has to fall below zero to signal a sell.

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

 

Recession:

Figure 3 shows the COMP below last week’s  downward 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.

 

 

Figure 3.1 shows the recession indicator iM-BCIg which also is down from last week’s level. An imminent recession is not signaled .

Please also refer to the BCI page

 

 

The 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 downward trend of the FRR2-10 has set in.

A description of this indicator can be found here.