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TrendFlex Credit Risk Premium Signals (CR)
TrendFlex Classic CR signal shifted to a Sell at the market close of /9/16. The Allegiance signal remains Long.
S&P 500 Return
|S&P 500 timing signals based on credit risk (CR) premiums (corporate vs.Treasury debt).|
|TrendFlex Classic CR||Short||3/09/17||-0.3%||+0.3%|
|TrendFlex Allegiance CR||Long||4/13/16||+17.5%||+17.5%|
The TrendFlex Score surged from 1.22 to 1.44 and closed above its three-week moving average, a bearish development. This coincides with the shift in the TrendFlex Classic CR score to a Sell signal.
TrendFlex Trend-Following Signals (TF)
The TrendFlex Classic TF and Allegiance signals remain in Uptrend.
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||10.9%||10.9%||1.10|
|TrendFlex Allegiance TF||Uptrend||5/31/16||13.0%||13.0%||1.00|
Baseline Analytics Extremes
Baseline Analytics Extremes highlights four key TrendFlex Indicators and their level of extreme readings. The key indicators include the following:
- CBOE VIX and Put/Call Ratio
- TED Spread
- 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 continues to remain at an extreme, expanding the gap below its moving average.
TED closed in on an extreme (chart below), which could suggest a rebound soon. As we hone in on the timing of its signals, the TED red zones can persist during a short-term downtrend. We would look for a shift back up through the "0" line on the oscillator indicator (bottom of chart) to suggest that a pullback in the S&P500 has ended. VIX and Put/Call are neutral (chart not presented).
The Portfolio Strategies chart remains bullish, with an edge toward risk-aversion. A short position in an S&P 500 e-mini future contract, for example, is one strategy to help hedge long positions.
|Set Stops on Longs|
|Short Overbought Equities|
|Add to Longs|
|Hedge or Reduce Shorts|
|Long Futures and Options|
*Red highlighted items are recommended strategies