TrendFlex Score

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

TrendFlex Score & TrendFlex Signals for 3/3/2017

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TrendFlex Credit Risk Premium Signals (CR)

TrendFlex Classic CR and Allegiance signals remains Long, despite a scare on the Classic CR chart earlier thsi week. 

TrendFlex Signal Trend  Date  Return

S&P 500  Return

S&P 500 timing signals based on credit risk (CR) premiums (corporate vs.Treasury debt). 
TrendFlex Classic CR Long 11/08/16 +11.4% +11.4%
TrendFlex Allegiance CR Long 4/13/16 +18.0% +18.0%
Historic Performance        


TrendFlex Score

The TrendFlex Score declined from 1.32 to 1.22 and remains below its three-week moving average.  Reviewing past levels in the 1.30 area of the TrendFlex Score, the S&P 500 has corrected about 5%.  We continue to interpret this level of the TrendFlex Score as a bullish extreme, especially with the .10 drop from last week.


TrendFlex Trend-Following Signals (TF)

The TrendFlex Classic TF and Allegiance signals remain in Uptrend.     

TrendFlex Signal Trend  Date  Return

S&P 500  Return


S&P 500 timing signals based on a weighted score of US Market technical indicators. Classic (short-term) and Allegiance (intermediate to long term).  Score:  Bullish = 1.0-1.75; Neutral = 1.75-2.25; Bearish = 2.25-3.0

TrendFlex Classic TF  Uptrend 11/8/16 11.4% 11.4% 1.00
TrendFlex Allegiance TF Uptrend 5/31/16 13.5% 13.5% 1.00
Historic Performance          


Baseline Analytics Extremes

Baseline Analytics Extremes highlights four key TrendFlex Indicators and their level of extreme readings.  The key indicators include the following:

  1. CBOE VIX and Put/Call Ratio
  2. TED Spread
  3. LQD vs. S&P 500 GAP reading

When one or more of these indicators has reached an extreme reading, chart and commentary will follow.  This week, the LQD indicator remains at an extreme, expanding the gap below its moving average.


 TED is also looking close to an extreme (chart below).  VIX is neutral while Put/Call is barely at an extreme level (chart not presented).



 The Portfolio Strategies chart remains bullish, with an edge toward risk-aversion.      

Portfolio Strategies*
Reduce Longs
 Sell Calls
 Hedge Longs
Set Stops on Longs
Short Overbought Equities
 Add to Longs
Sell Puts
Hedge or Reduce Shorts
 Long Futures and Options

 *Red highlighted items are recommended strategies


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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Guest Wednesday, 26 April 2017

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