Market Risk Report as of December 18, 2023

From Chief Investment Officer Tom Veale,

New records abound. The major stock indexes are setting new high water marks. All but the Energy sector are at or above their 26 Week moving average prices. What’s not to like?

All this accumulation pressure for stocks is putting a lot of upward pressure on SignalPoint’s Market Risk Indicator and its components. All four components rose in risk profile this week with two crossing into their cautionary territory. One remains neutral and the IPO activity component remains low and modestly bullish. This cumulative upward pressure raised the MRI by a another point to 28 while the MRI Oscillator shows a +7 or strong upward risk pressure.

With 80% of the S&P 500’s stocks now above their 200 day moving average prices it would appear the markets are a bit over-bought. However, the Advance/Decline ratios of the NYSE and NASDAQ both show very broad accumulation (which is healthy). Near market tops we usually see narrowing of market breadth which so far hasn’t happened in this rally. Maybe that’s some jingle bells we hear in the distance from this Santa rally. Or, maybe it’s just the pendulum swinging back from being over-sold earlier this Fall.

As the last Risk Report before the Christmas holiday, I’d like to extend best Season’s Greetings to all.

Best regards,

Tom Veale

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