Subject: Market Trend Indicators 2/24/23 - Trendless land
Well, that stunk (to put a nice word on it). All it took was a higher inflation print than forecast to put the brakes on and create a strong short term top in the last week of February. Bowley (@Stockcharts) wrote that February is historically the worst month of the stronger winter period, and this year (again) followed the pattern.
GTAA indicators are below. The summary:
* US LC Momentum, Emerging, Total bonds and 7-10 year treasuries flipped back below their moving averages to an 'out' state. (As yields increased in a changed anticipation of longer interest rate increases or pushed rate decreases.)
* Cash is now the top ranked asset based on straight average rank of 1,3,6, and 12 month returns. This condition is likely very short lived.
* Foreign Developed, US Small Cap and global high yield remain the top 3 non-cash in this ranking system (out if following Dual Momentum).
Timing signals
* The 3 active short term trend signals have flipped to a 'bearish/top' state.
* $NAHL (BC1) is back to bearish with a reading of -35 on the 9D EMA. SMA slope has gone back to Neutral.
* Midterm breadth has deteriorated.
* The Dow corporate bond index has flipped to bearish with the bond selloff/yield increases.
My overall dashboard has dropped back to 'Neutral' (-1) from solidly bullish 2 weeks ago.
Asset Class Signal Last Since # wks Top6 Rank
US LC CHG IN 2/1/23 3 8
US LC Momentum OUT OUT 2/24/23 0 11
US SC IN IN 1/13/23 6 2
US SC Growth IN IN 1/13/23 6 5
For. Developed IN IN 11/11/22 14 3
For. Dev. SC IN IN 11/25/22 12 7
Emerging OUT OUT 2/24/23 0 13
Real Estate IN IN 1/13/23 6 12
Foreign Real CHG IN 1/6/23 7 9
Total Bond OUT OUT 2/24/23 0 9
10Y US Gov OUT OUT 1/7/22 58 14
Global Hi Yield IN IN 1/6/23 7 4
Preferred IN IN 1/13/23 6 6
Cash/ST X 1
What madness will March bring?
FC