From Chief Investment Officer Tom Veale,
“The skirmishes we’ve been seeing between Bulls and Bears continued last week. At this point there is no clear winner, just ongoing daily battles. Our Market Risk Indicator (MRI) remained steady through all the events. An unusual event occurred with all four MRI components remaining essentially unchanged for the previous week.

With the drop in share prices on the major indexes has come an improvement in the average annual dividend yield of stocks that pay dividends. Value Line now shows a median estimated yield of 2.4%, a significant improvement from the 1.7% effective yield a year ago. (Median since 1982 is 2.2%) While this is below the current 13 Week Treasury Coupon Rate (3.591%/Yr) the total return potential with a base line of 2.4% from dividends is markedly improved.
Best regards,
Tom Veale
This week the MRI comes in at 29 once again. The MRI Oscillator is minus 1 indicating no directional pressure on risk. The Relative Valuation Index remains above its cautionary limit, the Speculation Index stayed below its proactive upper limit and is bullish, the Divergence Index and the New Issues Indexes both remain neutral. All four were unchanged after last week’s trading. In other words, the risk components and the overall MRI are treading water.”