Market Risk Report as of October 18, 2021

From Chief Investment Officer Tom Veale,

“While marginally above its median value the SignalPoint Market Risk Indicator (MRI) has now been steady for several weeks. Considering we are in the period of quarterly earnings reporting this could be an indication investors are reasonably confident of good results.

The S&P 500 has remained in a tight range with this same earnings anticipation in mind. The Relative Valuation component of the MRI was unchanged this week but remains well above its median value. Our Speculation Index is actually below median at this point. The confused day-over-day trading has raised our Divergence Index to above its neutral range while our New Issues/IPO Index continues its swing back toward a more normal level.
It takes a gain of 28% over the most recent 13 weeks to get a company on Value Line’s “Best Performers” list while a drop of nearly 32% puts a stock on the “Worst” list. This reasonable balance is part of the reason our Speculation Index is currently benign. Looking back to the start of July, 2021 we see it took a 44% gain to make the Best list while a drop of just 15% got a stock listed with the Worst.
11 of the 12 ETF Sector components in our all-domestic Signal 10 Strategy are currently within 10% of their next sell adjustment targets. That is comparable to the International Signal Strategy at this time. Both portfolios have slowed down in activity during the recent market consolidations. One surprise has been the gold surrogate ETF we monitor. It’s been flattish even as its distant cousin, Bitcoin, has been churning around. The debate continues as to whether gold will finally be unseated as the champion of stability during unsettled times.
Best regards,
Tom Veale
Our MRI is again at 35 with the Oscillator showing +1. Three of the components remain a full standard deviation away from their median values. Only the Speculation Index is currently neutral and below its median.”

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