TrendFlex Score

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The bullish market profile continues to improve.  TrendFlex Allegiance shifts to uptrend at Monday's open.  TrendFlex Allegiance II remains on downtrend, underscoring the potential resistance we may see should the S&P 500 attempt to match its summer highs.  

 

TrendFlex Signal Trend Signal Date Performance
TrendFlex Classic 1 Uptrend  10/12/15 +3.0%
TrendFlex Allegiance 1 Downtrend; shift to Uptrend 10/26  8/24/15 -5.8%
TrendFlex Classic II Uptrend  10/19/15 +2.1%
TrendFlex Allegiance II Downtrend 4/6/15 -0.5%

The TrendFlex Score decreased from 1.90 to 1.74 and remains below its three-week moving average, a bullish development.  

TFS10232015

There is no change to the Portfolio Options Table this week.  

POT10092015 

Click here  for the cumulative returns and trade history for the Baseline Analytics TrendFlex systems since their initial trades

The TrendFlex Classic score shifted to Uptrend at Monday 10/12 open.  The TrendFlex Classic II Score (our bond-based risk premium model)  will shift to an Uptrend on Monday, 10/19.  The longer-term Allegiance signals remain at Downtrend.

The Classic scores, turning bullish within the last two weeks, demonstrate how short-term technical signals can convey a bullish position within an overall bearish-looking landscape (as indicated by the longer-term Allegiance scores).  On a short-term basis, the odds of further gains to the upside appear favorable, given the relatively high TrendFlex Score.  Although the score closed at 1.90 on Friday (see chart below), it remains below its three-week moving average (a bullish development).  In addition, the score has a ways to go before it becomes risky to add to long positions (1.60 or lower may suffice as a low score in this environment).  For longer-term investors, we anticipate further resistance pressure should the S&P 500 approach its summer highs. In conclusion, the recent upside in the markets appear to be a countertrend rally.  A firm and sustained close above the summer highs is needed to shift this characterization of the equity markets.

TrendFlex Signal Trend Signal Date Performance
TrendFlex Classic 1 Uptrend  08/24/15 +0.9%
TrendFlex Allegiance 1 Downtrend  8/24/15 -3.9%
TrendFlex Classic II Downtrend; shift to Uptrend 10/19 9/28/15 -5.1%
TrendFlex Allegiance II Downtrend 4/6/15 +1.6%

The TrendFlex Score decreased from 1.98 to 1.90 and remains below its three-week moving average, a bullish development.  

TFS10162015

There is no change to the Portfolio Options Table this week.  

POT10092015 

Click here  for the cumulative returns and trade history for the Baseline Analytics TrendFlex systems since their initial trades

The TrendFlex Classic score improved to Uptrend on the week (entry price will be Monday's opening price of the S&P 500).  All other TrendFlex signals remain in downtrends, despite the 3.26% gain in the S&P 500 this week, as technical resistance points loom further ahead on the upside.  

Most major indices have entered overbought levels following the August selloff.  Many market technicians are viewing this current bounce as a counter-trend rally.  

 

TrendFlex Signal Trend Signal Date Performance
TrendFlex Classic 1 Downtrend; Shift to Uptrend 10/12 08/24/15 -2.5%
TrendFlex Allegiance 1 Downtrend  8/24/15 -3.0%
TrendFlex Classic II Downtrend 9/28/15 -4.3%
TrendFlex Allegiance II Downtrend 4/6/15 +2.5%

The TrendFlex Score decreased from 2.32 to 1.98 and closed below its three-week moving average, a bullish development.  

TFS10092015

There is a more bullish shift to the Portfolio Options Table this week.  

POT10092015 

Click here  for the cumulative returns and trade history for the Baseline Analytics TrendFlex systems since their initial trades

The Trendflex Allegiance signal shifts from Cash to Downtrend at Monday's open.   TrendFlex Classic shifted to a Downtrend effective with Monday's market open.  Other signals remain unchanged.  

Despite an impressive bounce from near the August lows, technical damage supports continued range-trading.  Surpassing the 2000 level on the S&P 500 will be key as to whether a sustained uptrend can be established.  We have been selling covered calls and identifying some opportunistic shorts to help hedge long positions.

TrendFlex Signal Trend Signal Date Performance
TrendFlex Classic 1 Downtrend 08/24/15 -0.7%
TrendFlex Allegiance 1 Cash, shift to Downtrend 10/5/15 8/24/15 +0.0%
TrendFlex Classic II Downtrend 9/28/15 -1.1%
TrendFlex Allegiance II Downtrend 4/6/15 +5.8%

The TrendFlex Score decreased from 2.36 to 2.32 (from Monday's intra-week update), while closing above its three-week moving average.  

TFS10022015

There is no change to the Portfolio Options Table this week.  

POT09182015 

Click here  for the cumulative returns and trade history for the Baseline Analytics TrendFlex systems since their initial trades

Monday's TrendFlex Score closed at 2.36, nearing heights previously associated with short-term bottoms in the equity markets.  Despite the technical carnage (which is clearly self-reinforcing as chart-followers and technical trading algorithms all follow the same tune - have we heard enough about that death cross yet?), stocks with compelling valuations are beginning to surface.  We prefer to see a reading in the 2.50 range to add to longs, but we may dabble a bit at this juncture.

See the chart below, where peaks in the TrendFlex Score coincide with trend shifts to the upside.

TFS09282015

 

 

 

9/25/15 Update:

Classic Traditional will shift to a downtrend at Monday's open, following a brief uptrend signal.  There are no signal changes othewise for this week.    

TrendFlex Signal Trend Signal Date Performance
TrendFlex Classic 1 Downtrend 08/24/15 +1.8%
TrendFlex Allegiance 1 Cash 8/24/15 +0.0%
TrendFlex Classic II Uptrend; shift to Downtrend on 9/28 9/9/15 -0.5%
TrendFlex Allegiance II Downtrend 4/6/15 +6.9%

The TrendFlex Score decreased from 2.23 to 2.17, while closing even with its three-week moving average.  

 TFS09252015  

There is no change to the Portfolio Options Table this week.  

POT09182015 

Click here  for the cumulative returns and trade history for the Baseline Analytics TrendFlex systems since their initial trades

Classic Traditional will shift to a downtrend at Monday's open, following a brief uptrend signal.  There are no signal changes othewise for this week.    

TrendFlex Signal Trend Signal Date Performance
TrendFlex Classic 1 Downtrend 08/24/15 +1.8%
TrendFlex Allegiance 1 Cash 8/24/15 +0.0%
TrendFlex Classic II Uptrend; shift to Downtrend on 9/28 9/9/15 -0.5%
TrendFlex Allegiance II Downtrend 4/6/15 +6.9%

The TrendFlex Score decreased from 2.23 to 2.17, while closing even with its three-week moving average.  

 TFS09252015  

There is no change to the Portfolio Options Table this week.  

POT09182015 

Click here  for the cumulative returns and trade history for the Baseline Analytics TrendFlex systems since their initial trades

There are no signal changes this week.  Despite an impressive rebound through Thursday, stocks appear wanting to retest their recent lows.  

TrendFlex Signal Trend Signal Date Performance
TrendFlex Classic 1 Downtrend 08/24/15 +0.4%
TrendFlex Allegiance 1 Cash 8/24/15 +0.0%
TrendFlex Classic II Uptrend 9/9/15 +0.8%
TrendFlex Allegiance II Downtrend 4/6/15 +5.5%

The TrendFlex Score increased from 2.13 to 2.23, a short-term bearish development, while closing above its three-week moving average.  

 TFS09182015  

The Portfolio Options Table is more cautious this week, considering the possibility that stocks may retest their recent lows.  

POT09182015 

Click here  for the cumulative returns and trade history for the Baseline Analytics TrendFlex systems since their initial trades

The TrendFlex Classic II (bond risk-premium indicator) signal shifted to an Uptrend following Wednesday's close.  There are no changes to the remaining Classic and Allegiance signals this week.  

TrendFlex Signal Trend Signal Date Performance
TrendFlex Classic 1 Downtrend 08/24/15 +0.2%
TrendFlex Allegiance 1 Cash 8/24/15 +0.0%
TrendFlex Classic II Uptrend 9/9/15 +1.0%
TrendFlex Allegiance II Downtrend 4/6/15 +5.3%

The TrendFlex Score decreased from 2.21 to 2.13and remains below its three-week moving average, a short-term bullish development.  

 TFS09112015  

The Portfolio Options Table is unchanged for the week. 

POT09042015 

Click here  for the cumulative returns and trade history for the Baseline Analytics TrendFlex systems since their initial trades

As noted this past weekend, the TrendFlex Classic II Signal was on the verge of reversing its Downtrend signal. Today, the signal issued an Uptrend (Long) signal for the S&P 500.  The entry price for the new signal will be at the opening price of the S&P 500 on Thursday morning (which will also be the closing price of the Downtrend (Sell) signal.

It seems premature for this indicator to flash a Long signal, given the tranding-range volatility in equities.  We will take the objective view however, and consider this perhaps an early sign of an eventual resumption of the uptrend in stocks. 

To refresh awareness of the difference between the TrendFlex Signals and their results, click here.

Click here  for the updated TrendFlex Classic II chart.

There are no changes to the Classic and Allegiance signals this week, following a 3.4% decline in the S&P 500. 

TrendFlex Signal Trend Signal Date Performance
TrendFlex Classic 1 Downtrend 08/24/15 +2.3%
TrendFlex Allegiance 1 Cash 8/24/15 +0.0%
TrendFlex Classic II Downtrend 4/13/15 +9.4%
TrendFlex Allegiance II Downtrend 4/6/15 +7.5%

The TrendFlex Score increased from 2.19 to 2.21 but remains below its three-week moving average, a short-term bullish development. With two weeks below its moving average, the TrendFlex Score may be signaling that the selloff in the markets is getting overdone, and the likelihood of a short-term trend shift is growing. 

TFS09042015  

Opportunistic traders (and long term investors seeking value plays) might want to consider adding partial long positions, given that the TrendFlex Score has settled below its moving average. To protect capital, stop limit orders are suggested. 

POT09042015 

Click here for the cumulative returns and trade history for the Baseline Analytics TrendFlex systems since their initial trades

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