Market Risk Report as of August 15, 2022

From Chief Investment Officer Tom Veale,

All the good news from the market indexes has an offset of adding back some market risk. If we were to call market risk something else such as appreciation potential, then higher risk suggests lower potential for appreciation. The last three weeks have used up some of that potential to investors’ benefit but also robbed a bit from future potential.

We can see this recent enthusiasm in the NYSE Cumulative Advance/Decline pattern as well.
It’s interesting to note in Value Line’s Best and Worst Performers lists what groups have been heavily represented. This week 18 of the 41 Best Performers are from the Bio and Med stock sectors. That’s unusual. Over on the Worst list Aluminum producers and precious metals along with retail sales companies are overly concentrated.
 
We anticipate a bit of consolidation this week as investors sort out their portfolio gains and losses. Good news for the nation is that Crude Oil has retreated to under $90/Barrel and seems to be leveling out. The lower price of fuels will help moderate the current “inflation” numbers and associated fears.
 
Best regards,
Tom Veale
 
SignalPoint’s Market Risk Indicator comes in another point higher at 29 this week. This is three points above the median but still not pushing the more bearish levels seen a year ago. The MRI Oscillator shows up this week at +8 indicating significant upward risk pressure currently. Only our Relative Valuation Index is currently above its bearish threshold while the other three components of the MRI remain neutral.

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