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Major Trend Index

Jun 18 2019

MTI: Consumer Confidence Worrisome “Inversion”

  • Jun 18, 2019

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.

Jun 11 2019

MTI: Economic Measures Continue To Lose Ground

  • Jun 11, 2019

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.

Jun 07 2019

MTI Back Into Negative Territory

  • Jun 7, 2019

Read this week's Major Trend.

Jun 04 2019

MTI Back In Negative Territory

  • Jun 4, 2019

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.

May 29 2019

MTI: Economic/Momentum Continue To Lose Steam

  • May 29, 2019

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.

May 21 2019

MTI: Economic Measures Remain Weak

  • May 21, 2019

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.

May 14 2019

MTI: Momentum Pulls Back

  • May 14, 2019

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.

May 07 2019

MTI: Edging Higher Within Neutral Band

  • May 7, 2019

Read this week's Major Trend.

Apr 30 2019

MTI: Stock Leadership Similar To Late 1990s’

  • Apr 30, 2019

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.

Apr 23 2019

Price Action Strong Despite Earnings/Liquidity Trends

  • Apr 23, 2019

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.

Apr 16 2019

MTI: Dead Neutral

  • Apr 16, 2019

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).

Apr 09 2019

MTI: Momentum Keeps Gaining

  • Apr 9, 2019

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.

Apr 05 2019

MTI: Firmly Neutral

  • Apr 5, 2019

Read this week's Major Trend.

Apr 02 2019

MTI: Valuation Factors Still A Drag, But Well Below Extremes

  • Apr 2, 2019

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.

Mar 26 2019

MTI Remains Low-Neutral

  • Mar 26, 2019

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.

Mar 19 2019

Economic Work Lifts MTI Into Neutral Zone

  • Mar 19, 2019

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.

Mar 12 2019

MTI: Valuations Ignoring Indications Of An Earnings Recession

  • Mar 12, 2019

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.

Mar 07 2019

MTI: Almost Neutral, But Not Quite

  • Mar 7, 2019

Read this week's Major Trend.

Mar 05 2019

Momentum Factors Reflect Breadth Of 10-Week Rally

  • Mar 5, 2019

All of the domestic and global quantitative Chart Scores in the Momentum category are now positive and both the Advance/Decline and High/Low figures leave no doubt as to the breadth behind the market’s 10-week rally.

 

Feb 26 2019

MTI: Still Negative, But Gap Narrows

  • Feb 26, 2019

The MTI’s stubbornness during the current rally confirms our overall sense that cyclical risks facing U.S. equities remain high. That said, we have great respect for the action of the market itself—enough so that we’ve allowed net equity exposure in our tactical funds to drift upward.

Feb 20 2019

MTI: Momentum Strengthens

  • Feb 20, 2019

Momentum category gain was driven by strength in breadth measures, selected trend models, and most of the Chart Scores.

Feb 12 2019

MTI: Attitudinal Measures Net Negative

  • Feb 12, 2019

The Attitudinal category, which tends to vary inversely with the Momentum work, turned negative for the first time since mid-October, suggesting growing investor conviction that the rally will continue.

Feb 07 2019

MTI: Still Short Of Neutral

  • Feb 7, 2019

Read this week's Major Trend.

Feb 05 2019

MTI: Big Boost In Momentum Measures

  • Feb 5, 2019

From a Momentum perspective, chart work has improved across the board but much of the longer-term trend work has remained in neutral or bear territory. These measures are, by definition, late at turning points, and we strongly prefer that the “anticipatory” tools within the MTI drive most of the swings.

Jan 29 2019

MTI: Investor Expectations Are Subdued

  • Jan 29, 2019

The Attitudinal category remains solidly bullish, suggesting there are significant investor doubts surrounding the rally. The market has also absorbed the past few days’ earnings torpedoes fairly well, another sign that expectations are still subdued.

Jan 23 2019

MTI: Economic Numbers Continue To Weaken

  • Jan 23, 2019

While growth rates in M1, M2, and MZM appear to have leveled off following their sharp declines over the prior 18 months, the annual rate of decline in the Adjusted Monetary Base (a good proxy for the Fed’s balance sheet) accelerated to almost 12% at year-end from just 3% six months earlier.

Jan 15 2019

MTI: Bear Market Rally In Progress

  • Jan 15, 2019

The move off the late-December lows has been broad and powerful but not at all unusual for a countertrend move in a bear market. Since 1945, bear market rallies in the S&P 500 have lasted an average of six weeks and carried the index higher by an average of 10.8%.

Jan 08 2019

MTI: Up A Bit, But Still Negative

  • Jan 8, 2019

Read this week's Major Trend.

Jan 03 2019

MTI: Attitudinal Factors Best Since 2016

  • Jan 3, 2019

The Attitudinal category’s net reading is the best (i.e., most pessimistic) since the week following the February 2016 correction low. While that’s an encouraging sign, there’s no mechanical threshold on this composite which would indicate a “safe” re-entry point.

Dec 26 2018

MTI: Intrinsic Value Readings Jump

  • Dec 26, 2018

The lack of more meaningful MTI improvement in response to this month’s collapse suggests the bear has yet to fully express himself. But the swipes he’s taken so far have hit hard: Last week saw a nearly 150-point gain in the Intrinsic Value composite to its best level since April 2016.

 

Dec 18 2018

MTI: Median P/E Ratios Much Improved, But Not Blue Chips’

  • Dec 18, 2018

The median trailing P/E across the Leuthold 3000 universe has corrected more than 30% from January’s bull market peak (and all-time peak) of 25.1x to just 17.3x on Friday, while the median Normalized P/E ratio has shrunk more than 20% to 22.4x.

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.