From Chief Investment Officer Tom Veale,
“The SignalPoint Market Risk Indicator (MRI) has flattened out and held steady at 46 for three weeks. The MRI Oscillator has hovered as well and comes in at +1 this week showing little pressure on the risk shown.
Again this week we find two of the MRI’s components (Relative Valuation and IPO Activity) in their respective bearish ranges while Speculation and Divergence are currently neutral. Market breadth is neutral with advancing and declining issues nearly equal. It has been noted that trading volume recently started to decline and Margin debt peaked early in 2021 and has started to decline. Maybe those market participants who have been treating their investments like a video game have become bored with it.
It does appear the amount of cash flowing into the U.S. stock markets has started to slow. Value Line’s Best and Worst Performing Stocks (latest 13 weeks) shows better balance than we’ve seen in quite some time. A 46% gain will get a company’s stock listed on the Best list while it now takes a decline of about 22% to make the Worst list. SignalPoint’s Speculation Index is still above its median but has come down substantially.
We are nearing the beginning of May so maybe the “Sell in May” crowd is making their move early.”