From Chief Investment Officer Tom Veale,
When consolidations come along we tend to see market risk reduced or at least redistributed. This week we see the SignalPoint Market Risk Indicator (MRI) moving downward again with three of the four components also moving down in risk profile.
With the MRI back to where it was at the start of 2023 what will we see for the remainder of the year? With SignalPoint’s Speculation and Divergence Indexes near their median points we could see some modest gains through the end of the year. The troublesome Relative Valuation Index is better than it has been since the year started but has yet to cross back below its cautionary level.
Company earnings growth has yet to match stock price growth to bring Price to Earnings back in line with historical levels. The recent consolidation has helped but this metric shows market upside potential is somewhat limited as we start into September.
As always, we remain vigilant while watching for opportunities to adjust share inventories in a proactive manner.
The MRI dropped another point this week to 31 while the MRI Oscillator moved to minus 3 (showing reduced market risk pressure).