It ain’t over ’til its over

 

If you follow this blog regularly, you will know that i periodically post the results from a compilation of indicators that I call the “Bear-o-meter”. The Bear-o-meter is not a crystal ball. But it is a pretty decent scorecard of measuring potential risk vs. return. The compilation consists of:

2 sentiment indicators (VIX, Smart/Dumb $)

2 trend indicators (50 & 200 day MA’s)

2 breadth orientated momentum indicators (New high/low and % stocks over 50 day MA)

2 specific breadth indicators (Cumulative AD line and INDU/TRAN confirmation)

1 fundamental indicator (trailing PE)

1 cycle indicator (seasonality)

 

Each indicator has parameters that I can quantitatively apply a score to. Some get higher weightings than others (e.g. 200 day MA  gets high rating than the 50 day MA).

 

On my last report of the Bear-O-meter on August 23rd ( https://www.valuetrend.ca/bear-o-meter-turns-bearish/) I noted that the compilation had slipped into the “higher risk” zone. You will note that this zone has 3 levels within it. The reading was “2” in August.

Bearometer 2

Recently, we’ve seen the VIX move into a neutral level (the VIX was well into my noted “complacent” zone of  below12 in August, now its  around 17). However, we’ve also seen the S&P500 (which is what the Bear-ometer is applied against) slip below the 50 day MA – effectively offsetting the reversal of the VIX. Thus, we remain in a high risk environment according to the Bear-o-meter. Market volatility has a greater than normal chance of being elevated for the time being – it ain’t over ’til its over.

 

I continue to hold cash and a small inverse position within the ValueTrend Equity Platform.

 

Apple’s rally is bullish for markets

aapl

Recent strength by AAPL is one positive for the market – looking out beyond the near termed risk noted above. Note the break of its downtrend with a nice test, a bullish MA crossover and a volume confirmation. AAPL is a major influence on the stock market – a bullish move will increase the potential for market strength going forward.

 

Don’t miss Keith speaking at the MoneyShow tomorrow (Friday September 16, 12:45pm)!

MoneyShow-corp-color
Here is the link Details

 

12 Comments

  • Unless the SPX breaks below sharply below 2100 that chart looks bullish. I am not selling anything until it does that.

    Reply
  • Watched you yesterday in the Bull Pen and bought your two books. Hope you didnt get too wet in your road race today.

    I enjoy watching you on BNN Keith. You provide great information.

    Reply
    • Thanks Bob–enjoyed it, although a little distracting with the wheel of fortune spinning so nearby! I normally have my own room and that is better for fitting more people–Cindy told me people had to leave as they couldn’t hear me. But anyhow, it was good.
      And Yes, nonstop rain on Sunday’s race, but then the stage on Sunday was the opposite–dry and sunny. So one nice day, one not. Good time anyhow.

      Reply
  • Hi Keith , whats your cash position lately ? And whats your currency view on USD ?
    Personally I am 100% in cash and just converted to USD at about 1.28 about two weeks ago , works good for now but do you think this run will last till first interest rate hike in US ?

    Reply
    • Yes the USD is in bull mode. I will blog on that today! always looking for ideas, and you just provided one!

      Reply
  • I would like your opinion on Dupont and Dow Chemical? Do you think these stocks are good technically? Will this reduction in competition after the merger be bad for the agriculture industry? Thanks.

    Reply
    • John I dont cover individual stock inquiries on this blog lest it open up a world of work for me if everyone sends me these questions–you can however email them ahead of time to BNN when I am on next- Oct 5th–specifiy the question is for me. I will try to take a look at the chemicals as a blog topic though–thanks

      Reply
  • Can you comment on Sean Hyman’s, Absolute Profits System, which is based on a secret Wall Street Calendar. It simply looks like seasonal investing and sector rotation.

    Reply
    • Robert I have never heard of this guy or his system. But here is my secret, and its a never before revealed “eat this message after reading it” Mission Impossible trading program: Buy in a breakout or existing uptrend. Sell in a breakdown. Take some off the table every summer and go all-in during the winter. Watch breadth and sentiment for signs of pending risk, and act if the trend changes.
      I am sorry, but now that I’ve told you this big secret, i will have to kill you. (Ha-ha)
      Words like “secret” and propitiatory” drive me nuts. There is nothing secret or mysterious about good investing technique. Good grief.
      Cheers!

      Reply

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