Market Risk Report as of August 16, 2021

From Chief Investment Officer Tom Veale,

“As we start the second half of August we find all US major indexes at near highs and up substantially for 2021 Year To Date. Ex U.S. exchanges have also managed double digit gains for the year while Emerging Market are just above break-even. All S&P 500 sectors have risen double digits with the exception of Consumer Staples (up 9.4%) for the year so far.

All this has occurred while the SignalPoint Market Risk Indicator has been wringing its hands over a variety of market measures. It is unprecedented to have such a run of above average risk readings in the MRI and its components. The MRI database starts in January of 1982 giving us a variety of market conditions and historical events on which to base the current readings. Even so, this week’s data gives the MRI at tally that is unchanged from previous weeks.
Three MRI components this week are above their average areas (Relative Valuation, Divergence and IPO Activity). Two moved upward in risk profile while one remained unchanged and one dropped. Currently looking at trading we note the Advance/Decline ratios for the NYSE and NASDAQ to be led by declining stocks. That concurs with our Divergence Index being unhappy with lots of new 52 week highs and lows simultaneously. That could be good news in disguise showing there’s at least some modest concern by investors as to the current market conditions.
The various SignalPoint Portfolio Strategies are in excellent condition with healthy reserves and growing prices. We continue to make minor adjustments to component sleeves to keep them current with market conditions.
Best regards,
Tom Veale
The MRI again this week comes in at 37, a full 11 points above its Median value (26) but down considerably from the highs seen earlier this year. The MRI Oscillator is benign at +2.”

Share Article: