Major Trend Index

The Major Trend Index edged down 0.03 points to a ratio of 1.21 based on data for the week ended June 10th, triggered mainly by an 80-point drop in the Attitudinal category.

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We’re fully cognizant that it’s not a “textbook” time to raise exposure, however, outside of valuations, the balance of our MTI work suggests the market still holds some cyclical appeal.

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The Major Trend Index pushed further into bullish territory based on data through last week, rising 0.09 points to a three-year high 1.22 ratio. Improvement in both the Momentum and Economic categories drove the gain. In addition, there were positive developments based on yesterday’s month-end prices that will be captured in the next MTI reading.

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The Major Trend Index remained in moderately bullish territory, falling 0.03 points based on data through last week. A 75-point loss in the Momentum/Breadth/Divergence work was the only outsized move among the five indicator groupings. This category, however, remains the strongest pillar underlying the MTI with a current net reading of +440.

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Riding a major upswing in the Momentum/Breadth/Divergence category, the MTI moved to positive for the first time in almost 10-months. Tactical Funds’ net equity exposure increased to near 55%.

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Based on data through the week ended April 22nd, on the back of a 100-point gain in the Momentum/Breadth/Divergence category, the Major Trend Index pushed a bit further into positive territory, rising 0.03 points to a 1.13 ratio. Leuthold tactical portfolios remain positioned with net equity exposure of 54%.

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The Major Trend Index returned to bullish ground based on data through the week ended April 15th, rising 0.07 to a ratio of 1.10. While it’s a struggle to put together a compelling fundamental (and especially value-based) argument for U.S. equities here, we can’t ignore the improvement in the MTI and related models used for reinforcement. But prices move ahead of fundamentals, and perhaps the work is discounting better times in the months ahead (rebounding earnings?).

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The Major Trend Index fell 0.01 to a ratio of 1.03 based on data ending April 8th, with moderate gains in the fundamental inputs (Valuation, Economics) offset by losses in components related to market action and investor psychology.

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This bullish action forced us to reverse a small mid-month addition to our equity hedge, and net equity exposure in the Leuthold Core and Global Funds is now 46%.

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The Major Trend Index rose 0.04 to a ratio of 1.01 based on data through last week, reflecting moderate gains in the Economic and Technical work. Net equity exposure in the Leuthold Core and Global Funds remains at 40% after last week’s small equity hedge increase of 6%.

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Based on data through the week ended March 18th, the Major Trend Index was unchanged with a 0.97 ratio (low-neutral zone). A big gain in the Momentum/Breadth/Divergence grouping was entirely offset by relatively sizable losses in the other four categories. These category movements prompted us to cut Leuthold Core and Global Funds’ net equity exposure to 40% (down from 46%). Short-term, an MTI return to negative territory could trigger additional increases to the equity hedge.

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Based on data through the week ended March 11th, the Major Trend Index improved 0.07 points to a marginally “Neutral” reading of 0.97 (readings of 0.95—1.05 are Neutral zone). A near 200-point gain in the Momentum/Breadth/Divergence category was the sole driver, offsetting moderate losses in the remaining four categories.

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The Major Trend Index rose 0.10 points over the last five weeks. Despite its improvement, the underlying message is that a cyclical bear market remains underway.

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The Major Trend Index ticked down 0.01 point to a ratio of 0.86 using data for the week ended February 26th. Losses in our sentiment and valuation work offset the technical improvement that had stemmed from recent market gains. The economic category stabilized following a multi-week slide, although there’s no sign the current earnings recession has begun to abate. 

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For the second week in a row, the Major Trend Index gained 0.02 points to close at a ratio of 0.87 using data for the week ended February 19th. We believe a bear market rally remains underway and have positioned the Leuthold Core and Global Funds with net equity exposure of 42%, compared with levels near 32% in the third week of January.

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The Major Trend Index rose 0.03 to a ratio of 0.83 using data for the week ended February 5th. The ratio was lifted by moderate gains in both the Attitudinal and Momentum/Breadth/Divergence categories. The work suggests a cyclical bear market remains in force—and it’s worth noting that virtually every global stock market measure other than the DJIA and S&P 500 tends to confirm that view. Broad market damage, in fact, has been severe enough that we’ve covered another portion of our equity hedge, lifting net equity exposure in the Leuthold Core and Global Funds to 40% from 36-37%.

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The MTI fell deeper into bear territory during a horrendous market month. The 0.80 ratio is consistent with an ongoing primary bear market—and so are many of the moves by various MTI categories.

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