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An update on a topic we’ve covered twice before—the wave of U.S.-listed Chinese companies that were mulling over going private. Because of relatively large discounts to offer prices, the taking-private targets represent a unique lower-risk investment opportunity.

Food Retail & Distributors, Leisure Products, and Trading Companies & Distributors caught our eye this month.

With the exception of Value, March was a bad month for quantitative factor performance. Every other factor category we follow underperformed, with Momentum posting its second consecutive –5% spread.

The final month of 2015 earnings reports registered an Up/Down Ratio of 1.07. Once again, we have to go back to the dark days of 2009 to find a lower “three-month” ratio.

After spending two months in discount territory, in March the Ratio of Ratios headed closer to its historical median premium of 4%.

Signs of a leadership change are starting to spring up between Growth and Value. Since mid-2015, Mid and Small Cap Value stocks have outperformed Growth.

From the lows on February 11th to the end of March, the S&P 500 rallied nearly 14%, propelling the index into positive territory for the YTD. Our Equal Weighed Average sprung back to life in the past two months; the largest handful of firms are no longer driving performance.

We have mentioned a number of times that China had experienced a very unpleasant “second-hand” tightening due to its peg to the dollar. Its trade competitiveness has suffered tremendously. With a weaker dollar the Chinese Yuan can re-gain some of its competitiveness while maintaining its peg to the dollar. A rare win-win in today’s convoluted world of finance.

We are getting more constructive on credits but we are still keenly aware of the highly volatile market environment and would recommend modest exposure to lower quality credits at this point.

More spread compression is likely ahead.

There is still a lot more room for Munis to underperform Corporate bonds.

We will be looking for a good follow-through to consider an upgrade of these bonds.

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%.

The S&P 500 gained 6.6% (price only) in March.

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%.

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.

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.

Richard Russell—who wrote Dow Theory Letters for almost 60 years before his death last year—observed that “bear market rallies look better than the real thing.”

The short-term market surge certainly possesses the hallmarks of many previous bear-killers (or correction-killers)…but it also sports the look of many historical bear market rallies.

Assuming—only for the sake of argument—the bull remains intact, its seventh anniversary will mark a rare case in which the market was lower than at its anniversary a year earlier.