From Chief Investment Officer Tom Veale,
“Three of the Market Risk Indicator’s components dropped in their profile this last week helping to lower the overall MRI value to 43 – two points down from the previous week. The MRI Oscillator shows minus 3 indicating declining risk pressure. Two MRI components are still bearish while two are neutral. While the overall MRI score is still bearish looking out 3 to 6 months it is improving as seen below.
We are seeing some consolidation from the New Issues surge earlier this year and the overall improved market earnings have helped drop the Value Line Price/Earnings level from its peak. As mentioned in previous reports, when we’ve experienced a large increase in the number of issues available for trading it tends to dilute supportive funds for more established common stocks. This tends to show up as a flattening of the major indexes for quite a while. We’ll be watching to see if this proves true once again.”