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VLT Momentum

Jan 13 2023

Is This Year’s Strong Start “Signal Or Noise?”

  • Jan 13, 2023

This year is off to a much stronger start than suggested by the 3-4% gains in the blue-chip averages: Through January 12th, the Value Line Arithmetic Composite—an equally-weighted index of about 1,700 stocks, was up 7.0%.

Jan 07 2023

VLT: “A Swing” And “A Miss”

  • Jan 7, 2023

We suspected November’s “low-risk” VLT Momentum BUY signal on the Dow Jones Industrials might turn out badly, and we were right: The Dow’s decline last month was enough to cause VLT to roll back over, which officially “rescinds” that signal. 

Dec 07 2022

Mixed Messages From VLT

  • Dec 7, 2022

While VLT for the S&P 500 continued to trend lower in November, the DJIA calculation edged higher and triggered a new BUY signal. The message could soon get more confusing: A BUY signal for the Russell 2000 would be triggered if that index closes December above 1,813, while the S&P 500 and NASDAQ would have to climb more than 11% and 15%, respectively, to trigger a VLT BUY.

Dec 07 2022

Don’t Trust The Thrust…

  • Dec 7, 2022

Jay Powell’s speech on November 30th triggered a 1,000-point intraday reversal on the DJIA and left us wondering who might have slipped the Chairman a recent copy of the Green Book.

Nov 05 2022

VLT: A Double-Sworded Edge

  • Nov 5, 2022

“Oversold” usually has a positive connotation in financial jargon, yet history’s worst air-pockets have almost always occurred when the stock market was deeply oversold. More time is needed before a “low-risk” entry point for the S&P 500 will be triggered from the VLT’s currently “oversold” status.

Oct 07 2022

Supercharging VLT With Small Caps

  • Oct 7, 2022

Leuthold did not invent VLT. The credit goes to Sedge Coppock, a technical analyst who insisted on being called an “econometrician.” While the famed Coppock Curve was based on the Dow Jones Industrial Average, Leuthold found the algorithm useful at the industry group level—it is a component within our Group Selection (GS) Scoring system.

Oct 07 2022

VLT Says Stocks Are Finally Oversold

  • Oct 7, 2022

The 2022 bear market has unfolded in a way that’s finally driven our Very Long Term Momentum algorithm for SPX into oversold territory for the first time since 2016. However, that only means a “low-risk BUY signal” is now mathematically possible—we could be writing about the “impending BUY” for many months to come. 

Jul 08 2022

Down—But Not Washed Out

  • Jul 8, 2022

Based on a short-term perspective, stocks may be ripe for a bounce. However, the S&P 500 has not reached “oversold” territory since early 2016, and it is still a long way from doing so. Of the major indexes, only the Russell 2000 is now positioning to soon claim a “low-risk buy” signal. 

Jun 07 2022

Down, But Hardly “Oversold”

  • Jun 7, 2022

Historically, a good measure of a fully oversold market has been a drop to negative by our VLT Momentum algorithm. YTD, it has been on the downswing, but is still in the vicinity of its highs reached during the Trump Bump. If the May bottom in the S&P 500 turns out to be the final low for the decline, VLT would be one of many suggesting the new rally is among the riskiest in market history.

Feb 05 2021

Energy: A Curse And A Blessing

  • Feb 5, 2021

The Energy sector emerged as the top performer for January, a nice respite after a terrible 2020—but not exactly a good omen. Unlike in horse racing—where the concept of “early speed” has significant predictive power—the early leader in the sector-performance sweepstakes hasn’t reliably followed through in the last 30 years.

Nov 06 2020

VLT’s Struggles Are Telling Us Something

  • Nov 6, 2020

Our Very Long Term (VLT) Momentum algorithm has been a very good “confirmatory” market tool over the years, especially at the onset of a new cyclical bull market. But VLT has proven to be of little to no value in navigating this year’s gyrations. VLT’s latest flip-flops reinforce our view that the market leaderboard is set to be rearranged.

Oct 07 2020

Five Reasons To Expect Higher Yields

  • Oct 7, 2020

Much of what we think “we know” about the bond market says yields should be headed higher.

Aug 06 2020

A “Low-Risk” BUY?!?

  • Aug 6, 2020

So what do we make of July’s “low-risk” VLT BUY signal on the DJIA—the index on which the indicator’s creator (Sedge Coppock) did his original work? Sadly, not much.

Jun 05 2020

A Bear That Left VLT Unscathed?

  • Jun 5, 2020

Our VLT Momentum algorithm was driven into oversold territory for at least a few months in all prior postwar bears. It didn’t happen yet this spring, which implies that the “grieving process” was neither deep enough nor long-lasting enough to set the stage for anything like a repeat of last decade’s bull. Most of our valuation work says exactly the same thing.

May 07 2020

A Bear Market In Price, But Not Time?

  • May 7, 2020

Valuations aside, the absence of any sustained market pain over the last ten years argues for challenging times for stocks in the new decade.

Apr 07 2020

Small Cap Smack-Down

  • Apr 7, 2020

We were fooled on Small Caps, and it’s been a “multi-factor” catastrophe.

Dec 18 2019

A Small Cap Strategy Session

  • Dec 18, 2019

Leuthold’s research team has recently flagged a number of items that suggest it may be time to consider small cap stocks. This asset class has been showing signs of life and the decision to overweight small caps is starting to seem relevant – and perhaps nicely profitable - again.

Dec 06 2019

More Good News For Small Caps

  • Dec 6, 2019

Our call for improved relative performance in Small Caps received another boost in November, when VLT Momentum for the S&P SmallCap 600 confirmed the prior month’s “low-risk” BUY signal on the Russell 2000.

Dec 06 2019

A Tough Tape To Read

  • Dec 6, 2019

Over the nearly two years since the stock market’s “momentum” peak in January 2018, the S&P 500 has gained less than 9%, while the Value Line Arithmetic Composite is unchanged. Mid Caps and Small Caps have made no upside progress during this period and most foreign markets are down.

Nov 07 2019

Jury Is Still Out On EM

  • Nov 7, 2019

Emerging Market stocks have been swept up in the last month’s rally in all things cyclical and high beta. Nonetheless, the MSCI Emerging Markets Index is still down marginally from its level coinciding with its April 30th VLT BUY signal.

Nov 07 2019

VLT Complicates The Market Puzzle

  • Nov 7, 2019

At October’s close, a long-term BUY signal was triggered on the Russell 2000. The fact that some market segments are triggering “oversold BUYS” when blue chips are at record highs speaks volumes about the internal disparities that have developed during the last few years. The Russell BUY signal is not inconsistent with our belief that the action since the January 2018 peak remains part of a lengthy cyclical topping process.

Nov 01 2019

The Market Puzzle Gets Even More Complicated

  • Nov 1, 2019

At last night’s close, the Russell 2000 generated a “low-risk” BUY signal on our Very Long Term (VLT) Momentum algorithm, a possibility we’d alluded to in the September and October Green Books.

Oct 05 2019

Small Cap VLT BUY: Not Quite...

  • Oct 5, 2019

Small Caps came tantalizingly close to activating a major VLT BUY signal in September, with the Russell 2000 closing less than a half percent below the trigger level. A new bull signal from this indicator wouldn’t “fit” into our market and economic narrative, but we won’t sweep it under the rug if it occurs.

Sep 07 2019

Commodity Stocks: “Low” But Not Cheap

  • Sep 7, 2019

A general rule of thumb for thematic equity investors is that the dominant leadership sectors and groups in a given bull market normally don’t repeat as leaders in the subsequent bull.

Sep 07 2019

Small Caps: “What If?”

  • Sep 7, 2019

The Russell 2000 is the most important major index on the cusp of a new BUY signal. Our best guess is that Small Caps will still trend lower for now, creating a buying opportunity in the months ahead.

Sep 07 2019

“Too Smooth” Of A Ride?

  • Sep 7, 2019

While investors in Value, Small Caps, and especially foreign stocks might beg to disagree, a key MTI technical measure suggests this decade’s stock-market ride has been almost entirely “pain free.”

Jul 05 2019

Big Is Still Beautiful

  • Jul 5, 2019

The 10-year-old bull grabs most of the headlines, but its younger sibling has begun to command more respect.

Jun 07 2019

Portraits Of An Out-Of-Sync Market

  • Jun 7, 2019

We suggested many years ago that the final top to this historic bull market would be a long and complicated process rather than a clean and singular event.

May 07 2019

Adding EM On A Rent-To-Own Basis

  • May 7, 2019

The Major Trend Index has remained in neutral territory during the last several weeks of upside action, suggesting there remain significant fundamental and technical shortcomings beneath it all. But this precarious MTI stance didn’t preclude us from acting on a new bullish reading for Emerging Market equities at the end of April.
 

May 03 2019

Adding Some Emerging Markets On A “Rent-to-Own” Basis

  • May 3, 2019

Emerging Market equities have been modest underperformers during the current rally, but they’ve marshaled enough strength to trigger a new low-risk BUY signal on our VLT Momentum algorithm at the end of April.

Apr 05 2019

VLT & Implications For Small Caps

  • Apr 5, 2019

For much of this decade, we had an allocation preference for Large Caps over Small Caps because of the considerable P/E premium commanded by the latter.