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Major Trend Index

Dec 11 2018

MTI: Rally Not Unusual When Trend Work So Negative

  • Dec 11, 2018

More of our long-term trend-following measures deteriorated to "bear" status, but it isn't unusual for the market to stage a brief countertrend rally when this work becomes as decisively bearish as it is now.

Dec 07 2018

MTI Says This Is A Bear Market

  • Dec 7, 2018

Read this week's Major Trend.

Dec 04 2018

MTI: Inflation Measures Have Faded Sharply

  • Dec 4, 2018

The Economic/Interest Rates/Inflation category was not a big mover on the week, but its relative stability of late has masked a major shift within key indicator groupings. Leading inflation measures have faded sharply, with upgrades across the board in the commodity readings.

Nov 27 2018

MTI: Fundamentals Improve

  • Nov 27, 2018

While the improvement in the fundamental categories is encouraging, the weight of the evidence continues to support a cyclically defensive stance toward the stock market.

Nov 20 2018

MTI: Extensive Overvaluation Vs. 1999/2000

  • Nov 20, 2018

A critical difference we’ve discussed repeatedly is that market overvaluation in the 1999/2000 episode was concentrated in roughly the top-50 Mega Caps, while current overvaluation—though arguably not as extreme—afflicts nearly the entire list of publicly-traded U.S. stocks.

Nov 13 2018

MTI: Too Early For Bullish Valuation Case

  • Nov 13, 2018

Although the Intrinsic Value category is now about 100 points above the worst levels recorded in early January, it is far too early to begin making a bullish valuation case for the stock market. Interestingly, some of the same pundits who warned “valuation is not a timing tool” on the way up are the ones trotting out these premature, value-based arguments—which are typically built on extremely-optimistic forecasts for 2019 operating EPS.

Nov 07 2018

MTI Slides Further Into Bear Territory

  • Nov 7, 2018

Read this week's Major Trend.

Oct 30 2018

MTI: Plunge In Momentum

  • Oct 30, 2018

Momentum category collapsed to receive its first negative reading since early March 2016, while the Attitudinal category flipped to net positive ground for the first time in more than 2-1/2 years.

Oct 23 2018

MTI: Acceleration In Global Tightening

  • Oct 23, 2018

We believe the catalyst for market weakness has been the decline in accommodation by the Fed and other central banks. While there has been a pullback in some of the leading inflation measures since June, the rate of global tightening has actually accelerated.

Oct 16 2018

MTI: Sharp Drop In Momentum

  • Oct 16, 2018

The abrupt decline in the Momentum work reflects deterioration in most trend models, along with bearish flips in the Chart Scores for the Russell 2000, NYSE Financials, KBW Bank Index, and Securities Broker/Dealer Index (XBD). The NYSE Daily Advance/Decline Line provided only limited warning of the impending weakness.

Oct 09 2018

MTI: Internal Weakness Reaches Major Market Indexes

  • Oct 9, 2018

The weakening we’ve observed for several weeks in most internal stock market measures began to spread last week to the “externals,” i.e., the major market indexes like the DJIA and S&P 500. Still, we are amazed these indexes remain so close to their cycle highs in light of the extent of subsurface damage reflected in the daily and weekly breadth figures.

Oct 05 2018

MTI Slides Further Into Bear Territory

  • Oct 5, 2018

Read this week's Major Trend.

Oct 02 2018

MTI: Breadth Continues To Erode

  • Oct 2, 2018

Since late August even the strongest of the market breadth measures—the NYSE Daily/Advance Decline Line—has failed to confirm highs in the DJIA and S&P 500, while the weakest—which measures 52-week highs and lows—has continued to erode.

Sep 25 2018

MTI: Intrinsic Value at New Negative Extreme

  • Sep 25, 2018

Swings within the five factor groups were muted, but the small loss in the Intrinsic Value work was enough to drop that category to a new negative extreme for the current bull market. The new low in this category counters the argument that U.S. stocks would “grow into” their valuations in 2018 thanks to the corporate tax cut and acceleration in GDP growth.

Sep 18 2018

MTI: 52-Week New Highs And Lows Both Elevated

  • Sep 18, 2018

High/Low Logic Index readings suggest a “fractured” stock market. Usually, though, a fractured stock market is also a narrow one, but the evidence on that score is mixed.

Sep 11 2018

MTI: Trend-Following Measures Remain Strong

  • Sep 11, 2018

Even the long-term trend model on the MSCI ACWI, which has been considerably weaker than the S&P 500 for several months, reverted to bull territory last week.

Sep 07 2018
Sep 05 2018

MTI: Market Sentiment Is Overconfident

  • Sep 5, 2018

The Attitudinal category neared a new negative extreme for the rally off February lows, while the Intrinsic Value category reached a new extreme for the entire bull market. This combination of overvaluation and overconfidence will eventually be resolved with large market losses…

Aug 28 2018

MTI: Modest Gains In Three Categories

  • Aug 28, 2018

Daily and weekly versions of all the advance/decline lines we track stood at cycle highs at week’s end, which—alongside the high in the Value Line Arithmetic Average—makes it hard to argue the market has narrowed significantly.

Aug 21 2018

MTI: No Major Swings

  • Aug 21, 2018

Improvement in the Momentum work has been insufficient to offset weakness elsewhere, leaving the weight of the evidence still bearish. However, persistent strength in this category has been enough to discourage us from establishing additional equity hedges in our tactical funds.

Aug 14 2018

MTI: Confidence Builds As S&P Flirts With High

  • Aug 14, 2018

The Attitudinal-category reading has moved to a six-month extreme as the S&P 500 flirts with its January high; improvement in the Economic work continues to reflect the pullback in various commodity measures.

Aug 07 2018

MTI: Economic Measures Improve

  • Aug 7, 2018

The 30-point gain in the economic category was driven by a continued pullback in inflation measures. It’s possible that some of this reflects the chilling effects of escalating trade tensions. If that’s true, it’s the only positive side effect we can think of, and it won’t last long.

Aug 07 2018

Negative MTI Suggests Rally At Risk

  • Aug 7, 2018

Read this week's Major Trend.

Jul 31 2018

MTI: Momentum Strengthens

  • Jul 31, 2018

A large gain in the Momentum category was almost entirely the result of a positive flip in a key market Reversal Model which had been bearish since March. While the long-term record of this model is good, its BUY signals over a forward three-to-six-month horizon have been less reliably bullish than, say, a breadth or momentum “thrust.”

Jul 24 2018

MTI: Sentiment Continues To Build

  • Jul 24, 2018

Sentiment toward stocks continues to heat up. Our S&P 500 Liquidity Premium shows that speculation in individual stocks is picking up relative to ETF trading, a negative sign. In addition, activity in stock index options shows the “smart money” rebuilding a bearish position.


Jul 17 2018

MTI Reflects High-Risk Stock Market

  • Jul 17, 2018

EPS gains, driven by the corporate tax cut, have led to improvement in several of our valuation measures, but the scope of these gains is small relative to the U.S. market’s degree of overvaluation.


Jul 10 2018

MTI: Inflation Measures Retreat

  • Jul 10, 2018

Our 52-week diffusion index on a 70-commodity basket now registers essentially neutral, while all of the non-energy commodity price sub-models have improved.

Jul 06 2018

MTI Remains Negative; Stay Defensive

  • Jul 6, 2018

Read this week's Major Trend.

Jul 03 2018

MTI: Market Not As Healthy Under The Surface

  • Jul 3, 2018

We’d concede that neither the relative strength of Small Caps nor the divergently strong action of the NYSE Daily Advance/Decline Line fit the pattern of a stock market undergoing a late-cycle period of distribution, however, the relatively low percentage of NYSE issues now trading above their 30-week moving averages (45.5%) suggests the market may not be as internally healthy as popularly portrayed.

Jun 26 2018

MTI Suggests Risks Still Elevated

  • Jun 26, 2018

After several weeks of muted movements, three MTI categories saw swings of more than 60 points. The Supply/Demand category’s loss was the biggest move, and mostly reflected commercial hedgers’ sudden unwinding of a big net-long position in stock index futures. Such action causes this important “smart money” indicator to be more in line with the DJIA’s Smart Money Flow Index, which continues to act badly.

Jun 19 2018

MTI: Market Behavior Remains Disjointed

  • Jun 19, 2018

Performance discontinuities across some of the major indexes are striking. For example, while the NASDAQ Composite is up 12% YTD, the NYSE Composite is down 1%, despite those strong A/D readings for the latter index. Today’s action leaves a similar gap between the Russell 2000 (up 10% YTD) and the DJIA (unchanged).

Jun 12 2018

MTI: Big Attitudinal Drop

  • Jun 12, 2018

The decline in the attitudinal work was fairly broad based, with a few indicators even moving back to maximum negative readings.

Jun 07 2018

MTI Now Decisively Negative

  • Jun 7, 2018

Read this week's Major Trend Index.

Jun 05 2018

MTI: Sentiment Measures Decline

  • Jun 5, 2018

A sharp loss in the Attitudinal category reflects declines in all major groupings of sentiment measures, ranging from investor opinion surveys, to fund flows, to option trading activity.

May 30 2018

MTI: Supply/Demand Measures Deteriorate

  • May 30, 2018

Supply/Demand work experienced the week’s largest category loss and reflects declines in the Smart Money Flow Index (which tracks opening and closing action in the DJIA) and in our Institutional Accumulation measure, which compares up and down volume to prevailing price action.

May 22 2018

MTI: Daily A/D Numbers Suggest Strength

  • May 22, 2018

The daily advance/decline numbers suggest the recent bounce has been broad, but analyses based on the 52-week highs and lows (including various versions of the “High/Low Logic Index”) are flashing warning signals similar to the ones seen in the fall of 2007 and summer of 2015.

May 15 2018

MTI: Stock Rally Propelled Optimism

  • May 15, 2018

Last week’s rally succeeded in driving up one of our shortest-term measures of investor optimism, while corporate tax cuts have helped generate the highest readings in the 33-year history of our earnings “breadth” work.

May 08 2018

MTI: Momentum Down Despite Market’s Weekly Gain

  • May 8, 2018

An important momentum sub-model, which considers relationships among rates-of-change for the major indexes, slipped to neutral after having been bullish since the spring of 2016. And while this model is whipsaw-prone, it’s generally on the right side of significant market breakouts or breakdowns.

May 04 2018

MTI Remained Negative During April

  • May 4, 2018

Read this week's Major Trend Index.

May 01 2018

MTI: Economic Measures Improve Slightly

  • May 1, 2018

While we’ve emphasized several negative developments within the MTI’s Economic composite in recent months, not all of the evidence leans bearish. Outside of the oil patch, commodities have struggled to make a clear breakout, possibly reflecting the short-term bounce in the dollar.