Update 4-26-13

Summary:

The IBH stock market model is out of the market. The MAC stock market model is invested but the indicators may be rolling over, the bond market model avoids high beta (long) bonds, the yield curve may be flattening, the gold model is not invested, but silver model is invested since last week. The recession indicator COMP is little changed from last week’s level.

Stock-market:

The IBH-model is out of the market as shown in Fig. 1. A sell signal was generated six weeks ago when the WLIg_shortEMA moved below the WLIg_longEMA.

The MAC-model stays invested. MAC Fig 2 shows the spreads of the moving averages, both levels not much changed from last week; they may be in the process of forming a top (rolling over). The sell spread (red graph) has to move below the zero line for a sell signal.

Bond-market:

The BVR-model avoids high beta bonds (long-bonds) and also intermediate duration bonds.
The Bond Value Ratio is shown in Fig 3. The BVR is approximately at last week’s level, with the overall trend downwards. In the longer term BVR will reach the long-term trendline and long-bond investors will have suffered considerable losses by then.

The Yield Curve:

The yield curve model shows the steepening trend, but seems to be making an interim mini-top. Figure 4 charts (i10 – i2). The trend is still up as one can see. FLAT and STPP are ETNs. STPP profits from a steepening yield curve and FLAT increases in value when the yield curve flattens. This model confirms the direction of the BVR.

Recession:

In Fig 5 one can see that COMP is about at last week’s level. It is 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.

Gold:

There is no buy-signal from the modified Coppock Gold indicator shown in Fig 6. This model has been out of Gold since Nov-26-2012. Gold would have to make a sustained move to $1700 and higher over the next few weeks for a buy signal according to my projections. This seems highly unlikely in view of the recent price decline. This indicator is described in Is it Time to Buy Gold Again? – Wait for the buy signal …….

Silver:

On Friday April 12, there was a buy-signal from the modified Coppock Silver indicator shown in Fig 7. This indicator is described in Silver – Better Than Gold: A Modified Coppock Indicator for Silver