Major Trend Index
MTI: Momentum Factors Continue To Gain Strength
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Momentum Reverses Losses Of Prior Week
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Negligible S&P 500 Loss Disguises Shaky Internal Action
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MTI Stable, But Still Negative
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MTI: Momentum And Economic Work Offset Negatives
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MTI: Internal Market Rotation Not Evidence Of Broadening Strength
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MTI: Broad Rally Lifted Momentum Inputs
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MTI: Cyclical Market Risks Remain High
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MTI Stable, But Still Negative
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MTI: Despite NYSE Daily A/D High, Breadth Is Ailing
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MTI: Same Old Song
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MTI: Attitudinal Improved But Still Net Negative
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MTI: Momentum Smacked Again
The hits to the Momentum category were broad-based; the Advance/Decline work continues to disguise a very dangerous, underlying bifurcation of the market.
MTI Stable, But Still Negative
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MTI: Momentum Takes A Hit
The Momentum category lost ground in the latest calculation, with more than three-quarters of the loss reflecting a flip in one of our “long-term” momentum sub-models from 50% bullish in the prior week, to maximum bearish at Friday’s close.
MTI: Economic Factors Lifted By Monetary Measures
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Growth in M1 and M2 money supply has picked up, offsetting the bearish readings for Adjusted Reserves and the Fed balance sheet. Momentum category also strengthened.
MTI: Momentum Improved Despite Modest Market Losses
The Momentum category improved despite last week’s modest market losses, with some of the longer-term trend work improving. Daily and weekly 52-week lows for the NASDAQ remain elevated, reflecting the increasing concentration of strength in Technology stocks.
MTI: Upside Surprises/Depressed Expectations
We think that the economic surprises, as well as the yield uptick, reflect an unwind of extremely one-sided positioning rather than an indication of a second-half economic rebound.
MTI: Attitudinal Measures Erode On Investor Enthusiasm
The Momentum category continues to grind higher, but this push has predictably stirred up investor enthusiasm (as measured this week by an identical decline in our Attitudinal composite). At the same time, longer-term measures like CEO Confidence, Small Business Optimism, and Consumer Confidence have all weakened in the latest reports, suggesting a rollover in animal spirits could be underway.
MTI Still Negative; Stay Defensive
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MTI: NOPE Index Boosts Economic Category
The bounce in the Economic category interrupted its last few months’ steady grind lower; the increase was led mostly by an upgrade to the NOPE Index (ISM New Orders Minus Price Index), which moved from high neutral to moderately bullish. The action of individual components is hardly reassuring, however.
MTI: Economic Work Continues To Erode
The Economic work continues to erode, and it would now be deeply negative if not for the conventional scoring of our leading inflation measures, in which disinflation is viewed as a good thing. But if our suspicions that this economic cycle will end in a deflationary bust are correct, the conventional interpretation will be wrong.
MTI: Consumer Confidence Worrisome “Inversion”
A less-publicized, but still worrisome “inversion” occurring beyond the Treasury market is that of Consumer Confidence, in which the Conference Board’s Present Situation Index has soared almost 70 points above the Expectations Index. This gap always becomes extreme in the late stages of an economic expansion, and today’s reading surpasses those recorded at all business cycle peaks other than February 2001.
MTI: Economic Measures Continue To Lose Ground
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We view market and economic risks as high, but the Momentum picture has been convincing enough to prevent us from adopting a maximally defensive posture.
MTI Back Into Negative Territory
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MTI Back In Negative Territory
We don’t like “news-driven” market moves, and it’s pretty obvious that May’s decline was due in large part to the ramp-up in the trade war. That said, trends in the economy and earnings were already weakening prior to the latest escalation.
MTI: Economic/Momentum Continue To Lose Steam
Aside from the decidedly bearish action in the Treasury yield curve, U.S. and global money supply growth rates remain sluggish; both the Fed balance sheet and the Adjusted Monetary Base are still in outright decline.
MTI: Economic Measures Remain Weak
Weakness in several coincident economic measures suggest that global-policy tightening over the last 18 months is having an impact. The current Fed policy stance doesn’t lead us to believe much improvement is likely in the near term.
MTI: Momentum Pulls Back
The Momentum work has been the largest week-to-week MTI swing factor for many months, and that was the case again last week. The Attitudinal category improved, reflecting increasing investor anxiety.
MTI: Edging Higher Within Neutral Band
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MTI: Stock Leadership Similar To Late 1990s’
We are not in the “melt-up” camp but we’re impressed by the close similarities in leadership with the greatest late-cycle melt-up of all time, which took place from late 1998 through March 2000.
Price Action Strong Despite Earnings/Liquidity Trends
Although we are not in the “melt-up” camp, we’d concede that stock market leadership is exactly what we’d expect if we were in that camp: Domestic over Foreign, Large over Small, and Growth over Value. Price action continues to remind us of the powerful rebound off the fall 1998 lows. Current earnings and liquidity trends, however, are not nearly as supportive as they were during that historic market move.
MTI: Dead Neutral
The Boom/Bust Indicator, a weekly ratio of industrial-commodity prices to initial unemployment claims, has had a near-vertical rebound to old highs in the last several weeks. This index usually peaks out many months in advance of a business cycle peak (although not in 2007, when it provided no warning of the pain to come).
MTI: Momentum Keeps Gaining
If the market’s manic rebound succeeds in assuaging consumers’ recently shaken confidence, we can certainly see a scenario in which the economy and corporate profits firm up after their current slowdown… although that is not our bet.
MTI: Firmly Neutral
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MTI: Valuation Factors Still A Drag, But Well Below Extremes
The Intrinsic Value category remains a drag on the MTI but is well below cycle extremes seen in January 2018 and again in September. The Momentum category, however, continues to nudge the MTI higher for the third consecutive week.
MTI Remains Low-Neutral
One of our long-term momentum models improved last week, while the Dow Bond Oscillator—as good of a mechanical monetary indicator as we’ve encountered—pushed further into positive territory.
Economic Work Lifts MTI Into Neutral Zone
Within the Economic work, the big development was a bullish flip in our Dow Bond Oscillator (DBO), which crossed above the zero threshold by the thinnest of margins. Subjectively, however, we are troubled that government yields across the maturity spectrum have been holding near recent lows in the face of equities’ powerful rally.
MTI: Valuations Ignoring Indications Of An Earnings Recession
Valuations seem to ignore indications that an earnings recession has begun, let alone the possibility that S&P 500 GAAP Earnings Per Share for 2018 could represent not just a short-term peak, but perhaps a cyclical peak as well.
MTI: Almost Neutral, But Not Quite
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