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The new GICS Communication Services sector being introduced late-September will include members that add considerable buoyancy to the growth rates and valuation ratios of this traditionally defensive, high yield, slow growth industry. As a newly-invented sector, Communication Services has no financial history, and we felt it was important to fill that void.

Even the long-term trend model on the MSCI ACWI, which has been considerably weaker than the S&P 500 for several months, reverted to bull territory last week.

In late January we speculated how long it would take for the S&P 500’s bloated valuations to reach more reasonable levels. The S&P 500 now trades back where it was in January and the seven-month break included some of the best growth rates most have ever seen. We found ourselves asking: Did chubby Mr. Market shed any pounds as he pedaled away on his stationary bike?

A “moderate-risk” S&P 500 VLT BUY signal was triggered at the end of August, but it’s not all good news. Any upturn in the VLT while the indicator is in positive territory also sets up a pattern known to veteran market analysts as the “Killer Wave.”

We previously mentioned the increasing focus on the real short-term interest rate as an important measure of the Fed’s policy stance. In truth, we wish the Fed had paid more attention to this measure during this cycle.

While the bottom-line impact may ultimately be the same, there’s one thing we find more demoralizing than getting the direction of an asset wrong: getting the direction right and not getting paid for it.

Many equity investors have suggested there’s no comparison between today’s expensive market and the bubble peak of Y2K, pointing out that today’s Technology titans are “real companies” with massive revenue underpinnings.

Traditional breadth measures have yet to show end-of-cycle thinning of the ranks, but some secondary measures suggest that process may be underway.

The S&P 500 has fully erased its January and February losses, but there’s probably a market message in the fact that it took so long to do so.

It’s been amusing to watch the narrative surrounding Fed policy evolve as the market has rallied.

The S&P 500 finally erased the losses from its nine-day swoon in January and February.

As mania surrounding Apple’s stock was reaching a fever pitch in early 2012, The Leuthold Group wrote a piece entitled, Apple, Just How High Can It Go? To those caught up in the hysteria, the article served as a cautionary reminder.

Both interest rates and investment grade spreads are at a reasonably attractive level to provide downside cushion.

Our Risk Aversion Index reversed higher last month and triggered a new “Higher Risk” signal. We recommend a defensive stance within fixed income.

The Leuthold Core and Global Portfolios both lagged their 100% equity benchmarks last month in a strong month for stocks.

The increasingly greater attention given to the yield curve by equity investors has prompted us to come up with an equity basket that can track the movement of the yield curve. Overall, it does a reasonably good job of capturing the major moves.

Read this week's Major Trend.

What some EM countries are going through is a classic sequence that can potentially lead to a full-blown EM crisis.

The S&P 500 gained 3% in August creating a fresh all-time high for the index.

While Momentum continues to work overall, the gains have been skewed to the companies trading at the highest valuation multiples. Extremes, based on both price and valuation, have only been greater a handful of times during the period measured.