Baseline Analytics Blog

Market risk assessment tools and tactical investment opportunities driven by curated financial insight

Trend Change Risk Assessment: February 6, 2016

The TrendFlex Classic CR (“Credit Risk”) indicator is a short-term measure of the risk of a change in the trend of the S&P 500.  We follow this indicator versus a moving average line and note Buy and Sell signals as the indicator crossed up (Buy) or down (Sell) through its moving average. 

As the S&P 500 has seen increased volatility while consolidating its recent gains, the TrendFlex CR indicator is close to breaching its moving average to the downside, a bearish development.  The signal tends to lead equities price movement, so we take this development as another caution sign for equities. 

Although the intermediate-term trend clearly is up, the risk of a short-term trend change appears to have increased.  See the chart below:

TFC02062017

Mr. Palmerton is the Founder of Baseline Analytics, and has 30 years of experience spanning corporate finance, asset management and financial markets research. He has held positions as CFO, Director of Finance, and Financial Management and Analysis roles for Fortune 500 and multi-national firms (ADP, Honeywell, Linde Group) as well as for early-stage and emerging growth ventures).

Bob founded Baseline Analytics in 2005. With the objective to utilize technical analysis of the financial markets, coupled with macro-economic trends, Baseline Analytics strives to keep investors on the right side of the market at all times. Bob developed the TrendFlex indicator, comprised of a blend of financial indicators that assess the risk of a change in market trend. Baseline Analytics’ TrendFlex models are utilized as the basis for asset allocation strategies of The Absolute Return Market Trend Portfolio. Mr. Palmerton’s articles and blogs can be found on Seeking Alpha, Finding Technicals and Baseline Analytics.

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