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TrendFlex Credit Risk Premium Signals (CR)
TrendFlex Classic CR and Allegiance signals remains Long, as the major indices continue to flirt with new highs.
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||+5.8%||+5.8%|
|TrendFlex Allegiance CR||Long||4/13/16||+12.1%||+12.1%|
The TrendFlex Score decreased from 1.30 to 1.28 and remains below its three-week moving average. It is resting at a level that in the past has preceded setbacks in equities.
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||Cash||9/26/16||5.8%||5.8%||1.20|
|TrendFlex Allegiance TF||Uptrend||5/31/16||7.8%||7.8%||1.25|
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.
A large gap in the LQD/SPX ratio vs. its moving average gets larger, suggesting that the recent rally may need a breather. The VIX indicator (below) has shifted to an extreme reading.
The TED Spread indicator has moved toward an extreme reading.
The Portfolio Strategies chart remains bullish. Hedges to long positions are in order given the extreme market readings and the low TrendFlex Score. We would refrain from adding longs, waiting for a breather in the markets.
|Set Stops on Longs|
|Short Overbought Equities|
|Add to Longs|
|Hedge or Reduce Shorts|
|Long Futures and Options|
*Red highlighted items are recommended strategies