Market Risk Report as of May 16, 2022

From Chief Investment Officer Tom Veale,

Can it be true? Could the SignalPoint Market Risk Indicator finally have fallen back to its Neutral territory?

While not back to its Median value it has dropped back to a more moderate reading. It’s taken a bit of damage to the S&P 500 Index to finally trim back risk as can be seen.
The MRI’s drop has come with two components, Speculation and Divergence, dropping to their respective bullish ranges. The equity selling spree removed much of the speculative excess and last week’s trading activity showed the consensus of investors to be believing in the bearish market scenario (low Divergence). Even our Relative Valuation Index dropped last week but not enough to return it to a neutral signal as of yet. Still, things are much improved relative to market risk.
The SignalPoint Process has been busy yet again on the Buy side during the last week. Both foreign and domestic ETFs of various types triggered buying as the week advanced. Cash held in reserve for such occasions is being carefully deployed to accumulate more shares of these shares at what appear to be distressed prices. We continue to look for further areas where our cash reserves can be frugally deployed.
Best regards,
Tom Veale
The SignalPoint Market Risk Indicator dropped another two points this week to 32. The MRI Oscillator shows a negative 7 indicating it’s diminishing risk pressure. It’s nice to see this happening just as the SignalPoint Process is busy accumulating more share inventory. Here’s how the Speculation Index looks after the recent weeks of investor selling:
It’s now at the lowest level seen since the start of the Covid recovery rally and has returned to ‘bullish’ levels.

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