iM Update – January 24, 2020

Market Signals Summary:

The MAC-US model, iM-Low Frequency Timer, and the S&P500 Coppock are invested in the markets, as is  the “3-mo Hi-Lo Index of the S&P500” which entered the market on 10/22/2018. The MAC-AU is also invested in the markets. 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 is steepening. The gold Coppock remains invested in gold, however the silver model is in cash. The iM-Gold Timer is ivested in gold since 1/21/2020.

The monthly iM-Google Trend Timer is invested since 12/1/2019.

 

Stock-markets:

The MAC-US model switched into the markets on 2/26/2019. The sell-spread (red line) is above last week’s value and needs to move below zero to generate a sell signal.

 

 

 

The 3-mo Hi-Lo Index Index of the S&P500 is above last week’s level at 14.48% (last 12.76%), and is invested in the stock market since 10/22/2019.

 

 

 

The Coppock indicator for the S&P500 entered  the market on 5/9/2019 and is invested.   This indicator is described here.

 

 

 

The MAC-AU model is invested in the markets after signaling a a buy on February 7, 2019. The sell-spread (red line) is above last week’s value and needs to move below zero to generate a sell signal.

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

 

Recession:

The COMP indicator will be discontinued and replaced by the new iM-Long Leading Idicator, see next entry.

Figure 3 shows the COMP above 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.

 

The current level of iM-LLI is plus 4.35, as indicated by the green dashed line in the figure. It is evident that the business cycle is near a cycle peak, in the “Boom” phase of the cycle, but a recession is not yet indicated. Therefore it is not likely, absent of a “black swan” event, that there will be a business cycle peak (recession start) during the next six months

 

Figure 3.1 shows the recession indicator iM-BCIg below 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 is not signaling a recession.

A description of this indicator can be found here.

 

The iM-Low Frequency Timer is back in the markets since 1/22/2019.

A description of this indicator can be found here.