Green Book November 2014
The Major Trend Index served up a Halloween surprise, returning to Neutral status with a weekly reading of 1.01 based on data from the last week of October. Our disciplines allow us some flexibility when the MTI resides in this relatively narrow (0.95–1.05) band, and we’ve elected to remain positioned with below-average net equity exposure of 42% in the Core Portfolio and 41% in the Global Portfolio (with the lower figure for Global reflecting the pathetic bounce in foreign stocks off last month’s lows.)
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Featured Articles
New Highs = Neutral
We remain positioned with below-average net equity exposure in tactical portfolios for now. We’re inclined to think there may be more trouble ahead for the stock market.
What To Make Of Market Leadership
The renewed embrace of risk hasn’t extended to the sector level. After resisting decline in late September through mid-October, defensive sectors have matched the rebound in Cyclicals, almost point for point.
Sentiment: Back To The Brink?
Investors are becoming more and more comfortable buying stock market dips. This is obviously latecycle behavior, but sentiment measures alone aren’t enough to tell us how late.
Interest Rates Range Bound—Can’t Be Too Bearish
The sell-off in risky assets in early October promptly led to expectations of a more dovish Fed.
Stocks Vs. The Dollar—More Complicated Than You Think
The recent strength in the dollar coincided with a spike in volatility and weakness in risky assets, but the relationship over the last couple years has been tenuous at best.
Earnings Momentum
Up/Down Earnings: Best One Month Reading Since Q2 2011
Small Cap vs Mid Cap vs Large Cap
Small Cap Premium Spikes Back To 20%
Table of Contents
Stock Market
- New Highs = Neutral
- A Game Of ‘What If?’
- What To Make Of Market Leadership
- U.S. Versus Foreign Stocks: More Of The Same
- Sentiment: Back To The Brink?
- “Fully-Invested Bears” Are The Year’s Big Winners
- Economic Green Light?
- Inflation & The Dollar
- Commodity Bears (i.e., Everyone) Should Read This
- A New Look At Frontier Market Risks
- Electronic Payment Industry: The Mobile Pay Players
Of Special Interest
Macro Monitor
- Interest Rates Range Bound—Can’t Be Too Bearish
- Risk Aversion Index Fell Sharply—New “Lower Risk” Signal
- US Bonds
Equity Strategies
Market Internals
- Earnings Momentum
- Small Cap vs Mid Cap vs Large Cap
- Growth vs Value vs Cyclicals
- Additional Factors
- Most Factors Navigate Volatility Well
Estimating the Downside
At Random
New Highs = Neutral
We remain positioned with below-average net equity exposure in tactical portfolios for now. We’re inclined to think there may be more trouble ahead for the stock market.
What To Make Of Market Leadership
The renewed embrace of risk hasn’t extended to the sector level. After resisting decline in late September through mid-October, defensive sectors have matched the rebound in Cyclicals, almost point for point.
Sentiment: Back To The Brink?
Investors are becoming more and more comfortable buying stock market dips. This is obviously latecycle behavior, but sentiment measures alone aren’t enough to tell us how late.
Interest Rates Range Bound—Can’t Be Too Bearish
The sell-off in risky assets in early October promptly led to expectations of a more dovish Fed.
Stocks Vs. The Dollar—More Complicated Than You Think
The recent strength in the dollar coincided with a spike in volatility and weakness in risky assets, but the relationship over the last couple years has been tenuous at best.
Earnings Momentum
Up/Down Earnings: Best One Month Reading Since Q2 2011
Small Cap vs Mid Cap vs Large Cap
Small Cap Premium Spikes Back To 20%
Stock Market
- New Highs = Neutral
- A Game Of ‘What If?’
- What To Make Of Market Leadership
- U.S. Versus Foreign Stocks: More Of The Same
- Sentiment: Back To The Brink?
- “Fully-Invested Bears” Are The Year’s Big Winners
- Economic Green Light?
- Inflation & The Dollar
- Commodity Bears (i.e., Everyone) Should Read This
- A New Look At Frontier Market Risks
- Electronic Payment Industry: The Mobile Pay Players
Of Special Interest
Macro Monitor
- Interest Rates Range Bound—Can’t Be Too Bearish
- Risk Aversion Index Fell Sharply—New “Lower Risk” Signal
- US Bonds
Equity Strategies
Market Internals
- Earnings Momentum
- Small Cap vs Mid Cap vs Large Cap
- Growth vs Value vs Cyclicals
- Additional Factors
- Most Factors Navigate Volatility Well