Update Archive

iM Update 7-26-13

Please also see the Best10 weekly update on the [Systems][Best10 Portfolio Management Systems] page.
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BCI 7-25-13

Download BCI (1967-2013) as a XLS spreadsheet

Yesterdays release of New Houses for Sale and Sold increased in June over the revised May figure, and a further reduction of the continues unemployment claims and the strengthening S&P 500 boosted the BCI.
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iM Update 7-19-13

The IBH stock market model is out of the market. The MAC stock market model is invested, the bond market model avoids high beta (long) bonds, the yield curve is steepening, the gold model is not invested, but the silver model is invested. The recession indicators COMP and iM-BCIg are near last week’s levels. MAC-AU is also invested.

BCI 7-18-13

Download BCI (1967-2013) as a XLS spreadsheet

Although the S&P 500 gained this week the BCI declined as the continues claims of the unemployed rose by 91,000 to 3,114,000 from last week’s upward revised figures; alternatively it is is an increase of 161,000 over the 2,953,000 of two weeks ago.
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iM Update 7-12-13

Please also see the Best10 weekly update on the [Systems][Best10 Portfolio Management Systems] page.
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BCI 7-11-13

Download BCI (1967-2013) as a XLS spreadsheet

All the components of the BCI indicate a positive trend and BCI increased to new high of 156.9
However, BCIg for the fourth week in succession on a downward path at 20.5 from last week’s 20.8
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iM Update 7-5-13

Market Signals Summary: The IBH stock market model is out of the market. The MAC stock market model is invested, the bond market model avoids high beta (long) bonds, the yield curve is steepening, the gold model is not invested, but the silver model is invested. The recession indicators COMP and iM-BCIg are both a bit lower from last week’s level. MAC-AU is also invested.

BCI 7-5-13

The Business Cycle Index slightly down at 155.8 from last week’s upwards revised 156.3 breaking the long trend of weekly gains.

iM Update 6-28-13

Market Signals Summary: The IBH stock market model is out of the market. The MAC stock market model is invested, the bond market model avoids high beta (long) bonds, the yield curve is steepening, the gold model is not invested, but the silver model is invested. The recession indicators COMP and iM-BCIg are both a bit higher from last week’s level. MAC-AU is also invested

BCI 6-27-13

The Business Cycle Index slightly down at 155.8 from last week’s upwards revised 156.3 breaking the long trend of weekly gains.

iM Update 6-21-13

The IBH stock market model is out of the market. The MAC stock market model is invested, the bond market model avoids high beta (long) bonds, the yield curve is steepening, the gold model is not invested, but the silver model is invested. The recession indicators COMP and iM-BCIg are both a bit lower from last week’s level. MAC-AU is also invested.

BCI 6-20-13

With BCI at 155.8 and BCIg at 20.9 no sign of a recessionary trend is indicated

iM Update 6-14-13

The IBH stock market model is out of the market. The MAC stock market model is invested, the bond market model avoids high beta (long) bonds, the yield curve is steepening, the gold model is not invested, but the silver model is invested. The recession indicators COMP and iM-BCIg are both a bit higher from last week’s level. MAC-AU is also invested.

BCI 6-13-13

The BCI marginally increased to 155.5 and the BCIg increased slightly to 21.2; both signalling a economy far from a recession.

iM Update 6-7-13

The IBH stock market model is out of the market. The MAC stock market model is invested, the bond market model avoids high beta (long) bonds, the yield curve is steepening, the gold model is not invested, but the silver model is invested. The recession indicator COMP is higher from last week’s level, and iM BCIg is also higher. MAC-AU is also invested.

BCI Update 6-6-13

Download BCI (1967-2013) as a XLS spreadsheet

Positive are the further decreases in the seasonally adjusted insured unemployment, for the week ending May 25 the number was 2,952,000, a decrease of 52,000 from the preceding week’s upward revised level of 3,004,000. Negative is the slight -1.1% downward trend of this week’s 5 day average of the S&P 500.
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iM Update 5-31-13

The IBH stock market model is out of the market. The MAC stock market model is invested, the bond market model avoids high beta (long) bonds, the yield curve is steepening again, the gold model is not invested, but the silver model is invested. The recession indicator COMP is higher from last week’s level, and iM BCIg is also higher. MAC-AU is also invested.

BCI Update 5-30-13

Download BCI (1967-2013) as a XLS spreadsheet

This week negative influence on the BCI, namely that the S&P 500 is slightly down and the continued claims of the insured unemployed has risen, could not outweigh the strong gains of the previous weeks, and the moving averages of these elevate the BCI to 155.3 a gain of 0.23% on last week. The BCIg is also up at 20.8 (BCIg is the 6-month smoothed annualized growth of BCI and six added to it) For more information please visit the BCI page
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iM Update 5-24-13

The IBH stock market model is out of the market. The MAC stock market model is invested, the bond market model avoids high beta (long) bonds, the yield curve may be steepening again, the gold model is not invested, but the silver model is invested. The recession indicator COMP is higher from last week’s level, and iM BCIg is also higher. MAC-AU is also invested.

BCI Update 5-23-13

Download BCI (1967-2013) as a XLS spreadsheet

The BCI keeps on climbing, not only driven by the gains of the S&P 500; the continues unemployment dropped by a massive 112 thousand from last week’s upwards revised figure of 3.024 million to 2.912 million. A further positive economic trend is the quantity of new houses sold, 454 thousand estimated for April, which is up from the upward revised figure of 444, from 411 thousand of March.
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iM Update 5-17-13

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The IBH stock market model is out of the market. The MAC stock market model is invested, the bond market model avoids high beta (long) bonds, the yield curve may be steepening again, the gold model is not invested, but the silver model is invested. The recession indicator COMP is lower from last week’s level. We have added MAC-AU for the Australian market.
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BCI Update 5-16-13

Download BCI (1967-2013) as a XLS spreadsheet

The BCI continues its upward trend to a level of 152.8, with the BCIp on a 100, by past performance, a recession is not in sight.
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iM Update 5-10-13

The IBH stock market model is out of the market. The MAC stock market model is invested, the bond market model avoids high beta (long) bonds, the yield curve may resume its steepening trend, the gold model is not invested, but the silver model is invested. The recession indicator COMP is little changed from last week’s level.

BCI Update 5-9-13

The BCI continues its upward trend to a level of 152.3 after strong employment reports and an even stronger rally of the S&P500

iM Update 5-3-13

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.

Monthly 5-3-13

Based on the historic patterns of the unemployment rate indicators prior to recessions one can reasonably conclude that the U.S. economy is currently not in a recession. The modified S&P Coppock is invested.

Next

iM-DrawdownShield

New Model – Coming Soon
A fully technical S&P 500 market timer using a novel three-horizon trend analysis to identify sustained market movements, reduce exposure during declining markets and participate in rising markets — with relatively infrequent trading.
Investing in the stock market can deliver attractive long-term returns, but major market crashes can wipe out years of gains.
The challenge is not simply to make money in rising markets, but to protect your capital when markets turn down.
The iM-DrawdownShieldis designed to do both. It follows the S&P 500 during favourable market conditions and switches to defensive investments when the risk of a sustained decline increases. Its objective is to reduce major losses without sacrificing long-term investment performance.
In a historical simulation covering 1995–2026, the S&P 500 ETF (SPY) experienced a maximum drawdown of 55.2%. The model’s dynamically selected Treasury ETF strategy reduced this to 19.6%, while achieving an annualised return of 12.1%, compared with 11.0% for SPY.

Stocks Are Overvalued, Expect Losses And Low 10-Year Forward Returns: Update October 2025

The S&P 500 averaged 6,736 for October 2025, 2,604 points above its long-term trend of 4,132, implying a 39% decline to reach the trend and signifying a valuation substantially above historic norm.
The long-term trend indicates a forward 10-year annualized real return of only 1.4%, while the CAPE-MA35 methodology derived 10-year annualized real return is also modest at about 4.3%, indicating limited long-term upside.
The short-term outlook indicated by CAPE-MA35 Neutral phase has historically yielded low short-term returns.

The iM CAPE-MA35 ETF Rotation Strategy with 4 ETFs

This is a dynamic ETF allocation strategy using the CAPE-MA35 ratio—the Shiller CAPE divided by its 35-year moving average—to identify market phases and adjust portfolio exposure.
The model defines four primary phases with respective ETFs—Growth (QQQ), Defensive (GLD, XLU), Uptrend (QQQ, XLE), and Downtrend (GLD)—based on the trend and relative valuation of CAPE-MA35. ETF allocations are adjusted monthly in response to these phases.
Backtesting from 1999 to 2025 shows the model outperforms SPY with 20.1% annualized returns, lower drawdowns, and consistent long-term performance with low turnover.
The strategy offers a practical, rules-based approach to market timing, blending long-term valuation with trend analysis for superior risk-adjusted returns.

Dynamic ETF Allocation Using CAPE-MA35: A Market Timing Framework Based on the Shiller CAPE

This study presents a rules-based ETF allocation model that uses the CAPE-MA35 ratio—the Shiller CAPE divided by its 35-year moving average—to identify distinct market phases and dynamically adjust portfolio exposure.
The model defines four primary phases—Growth, Defensive, Uptrend, and Downtrend—based on the trend and relative valuation of CAPE-MA35. ETF allocations are adjusted monthly in response to these phases.

Stocks Are Still Overvalued Despite Recent Significant Declines, Expect Further Losses, But Modest 10-Year Forward Returns: Update April 2025

The average of S&P 500 for March 2025 was 5,680, declining to 5,074 by April 4, 2025 (now 13% up from Jul-2023 average of 4,497 when forward returns for stocks “looked reasonably good” according to this analysis).
The S&P 500 is still 1,140 points higher than the corresponding long-term trend value of 3,934 for April 2025.
For the S&P 500 to reach the corresponding long-trend value would entail a 22% decline from the April 4, 2025 value, indicating that the S&P 500 is still considerably overvalued.
Assuming that the current S&P 500 value remains unchanged until the end of April, then the CAPE-ratio would be 31.0, 15% higher than its 35-year moving average (MA35), currently at 26.9.
The long-term trend indicates a forward 10-year annualized real return of 4.0%, while the CAPE-MA35 methodology derived 10-year annualized real return is better at about 6.7%.

With reference to Section 202(a)(11)(D) of the Investment Advisers Act: We are Engineers and not Investment Advisers, read more ...
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