Latest Research

Small Cap Premium Drops to 8%

Growth Showing No Mercy To Value

S&P 500: Largest Firms In Charge

The MTI is holding just above the Negative zone and net equity exposure was reduced to 48-49% in the Leuthold Core and Global Portfolios (from 55% in early July, and 61-62% in June).

The Major Trend Index declined 0.02 points to a ratio of 0.98, reflecting small losses in three of its five categories. 

MTI Declined To Neutral; Net Equity Exposure Cut To 55% In Early July

The U.S. 10-year yield looks ready to re-test the ceiling of the previous downtrend...The recent weakness in oil prices brought back some very unpleasant memories from 2014. Implications for breakeven rates and credits are not so sanguine...We are at a crossroads and a cautious stance is warranted.

Divergences have emerged: countries on a tightening path (e.g. US and UK) were more or less on track until June; while countries on an easing path (e.g. Germany, Japan, & Australia) went off script, as policy trumped historical patterns.

However, we recommend a defensive bias within the fixed income space for the time being.

New late-June highs in NASDAQ, Small Caps, and key Financial groups weren’t enough to stem the past few weeks’ slide in the Major Trend Index, which has landed back in its neutral zone (1.01 reading).

Last month we discussed the negative market implications of May’s “Death Cross” signals in the Dow Transports and Dow Utilities.

One could conceivably argue the market is still “cohesive” enough to hold together for awhile longer. June 23rd saw closing bull market highs in the NASDAQ, Mid Caps, Small Caps (both the S&P 600 and Russell 2000), and the critical KBW Bank and NYSE Arca Broker/Dealer Indexes.

The NASDAQ has solidified its grip on 12-month leadership, rising 11% versus a 4% loss in the NYSE Composite. A surprising feature of NASDAQ’s relative strength dominance is that is has not been accompanied by a rise in relative volume.

The Volume Oscillator discussed in this section is one of several encouraging developments within our Attitudinal work that has sent that category to its least negative reading (-57, Chart 1) since July 2013.

The smoothed, 26-week rate-of-change in the DJ Corporate Bond Index, a reliable indicator of monetary conditions over many different market and economic cycles, turned negative in mid-June.