iM Update – July 20, 2018

Market Signals Summary:          

The MAC-US model is invested. 

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The MAC-AU is also invested.  The recession indicators COMP and iM-BCIg do not signal a recession. 

 

Stock-markets:

Fig-2.-7-20-2018The MAC-US model generated a buy-signal 4/5/2016 and thus is invested in the stock-markets. The sell-spread (red graph) is above last week’s level and has to fall below zero to signal a sell.

 

 

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Fig-2.1-7-20-2018The MAC-AU model is invested in the markets after it generated a buy signal on March 21, 2016. The sell-spread is remains near 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:

Fig-3.-7-20-2018Figure 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.

 

 

Fig-3.1-7-20-2018Figure 3.1 shows the recession indicator iM-BCIg  at last week’s level. An imminent recession is not signaled .

Please also refer to the BCI page

 

 

Fig-3.2-7-20-2018The Forward Rate Ratio between the 2-year and 10-year U.S. Treasury yields (FRR2-10) is down from last week’s level and is not signaling a recession.  The FRR2-10 general trend is downwards.

A description of this indicator can be found here.

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