iM Update – August 31, 2018

Market Signals Summary:          

The MAC-US model is invested.  The “3-mo Hi-Lo Index of the S&P500” generated a buy signal on 6/12/2018 and is invested in the markets. 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 is flattening and signaled  buy FLAT end March 2018. The gold Coppock model is invested, however the silver model is in cash since early August 2018. 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 above 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  above  last week’s level at 10.09% (last week 8.55%), generating a buy signal, and is invested in the market since 6/12/2018.

 

 

 

The MAC-AU model is invested in the markets after it generated a buy signal on March 21, 2016. The sell-spread is above 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 down from 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  at 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 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.