Market Risk Report as of May 2, 2022

From Chief Investment Officer Tom Veale,

Last week it appeared a bear shark swam into a school of tasty speculator fish. The school all turned and attempted to swim to safety. Some were more successful than others.

True to the contrary nature of our Market Risk Indicator when we see broad stock price sell-offs we usually see the MRI fall in its risk view. Three of the four MRI components did drop in their own risk ranges with only one going up slightly. Here’s  how it looks:

There’s some data lag in the MRI so if the bear shark is still hungry this week we’ll probably see a further decline in measured market risk.
Our SignalPoint management process continued to do selective buying last week in income ETFs as well as a few equity funds. The large hold zone between a sell trigger and the next buy target helps keep our reserves of cash from being deployed with minor price drops. However, once we’ve seen a 15% to 20% drop from a previous selling price the risk management machinery starts to give us buy signals. As an example, our Signal 10 ETF portfolio currently has only 5 components within 10% of their Next Sell targets. That leaves 7 components that have now dropped closer to their Next Buy prices. As of this writing, the “futures” are slightly positive before the market open. We’ll continue to watch the activity to see if the bearish sentiment remains dominant this week.
Best regards,
Tom Veale
The MRI comes in at 36 this week, down two points from the previous score. The MRI Oscillator turned downward to minus 3 indicating declining risk pressure.

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