So far this year the equity markets have been strong, with the S&P 500 Index (SPX) up 12.3% and NASDAQ 100 (NDX) up 14.4% as of the end of last month. The performance of our Opportunistic ETF model is up 10.1% (net of fees) as of October 31.
Our HVI values are negative in magnitude for most long funds. This is consistent with a falling market. Whereas some “technical analysis” newsletters are calling for a U.S. bear market and a recession this year, we don’t believe either will happen. The Fed is pumping too much money into the financial system for this to happen–as long as Congress resets the U.S. budget responsibly. Thus we think this market weakness will not last too much longer.
Our analysis indicates that all style-box funds have negative momentum. All Sectors, except utilities, have negative momentum. Similarly for emerging markets, Germany, and the U.S. S&P 500. The U.S. dollar has positive momentum. This is probably because Europe is inflating its currency faster than the U.S. is.
At this time we like Japan, electronics, and semiconductors. We also like money market due to the recent drop in equities. We have new signals to go to money market for the S&P500, NDX, and gold. We have a new buy on bonds.
Because the markets can turn quickly, be ready. May the market be with you!
Any index comparisons provided in the blogs are for informational purposes only and should not be used as the basis for making an investment decision. There are significant differences between client accounts and the indices referenced including, but not limited to, risk profile, liquidity, volatility and asset composition. The S&P 500 is an index of 500 stocks chosen for market size, liquidity and industry, among other factors. The NASDAQ-100 is a stock market index of 100 of the largest non-financial companies listed on the NASDAQ.
Certain information contained in this presentation is based upon forward-looking statements, information and opinions, including descriptions of anticipated market changes and expectations of future activity. The manager believes that such statements, information and opinions are based upon reasonable estimates and assumptions. However, forward-looking statements, information and opinions are inherently uncertain and actual events or results may differ materially from those reflected in the forward-looking statements. Therefore, undue reliance should not be placed on such forward-looking statements, information and opinions.
