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Net cash inflows resumed for domestic equity mutual funds, and YTD net flows are likely to hold in positive territory for the first time in eight years. Conversely, bond mutual funds are looking to lock in the largest nominal annual net cash outflow ever recorded.

The Major Trend Index rose 0.01 to 1.10 in the week ended December 20th. This work remains bullish, but by a narrower margin than for most of 2013. We continue maintaining above-average exposure to equities, with the Core Fund now at a net exposure level of 64% and the Global Fund at 65%. 

Net cash outflows from bond mutual funds are not letting up, with this week's estimated net outflow at $8.8 billion. Domestic equity mutual funds net cash outflows are an estimated net $11.5 billion, but foreign-focused mutual funds have total net cash inflows of $133.3 billion YTD.

The Major Trend Index fell 0.03 to 1.09 in the week ended December 13th. The reading remains bullish, but is now just 0.04 above the 0.95-1.05 neutral zone. We continue targeting net equity exposure of 63% in the Core and Global Funds, but we are now on a higher level of alert. 

Outflows From Domestic Equity & Bond Funds Continue; Foreign-Focus Funds Still See Inflows.

The Major Trend Index was down 0.03 to a reading of 1.12 for the week ended December 6th. Both the Core and Global Funds continue targeting net equity exposure of 63%.

These stocks have been beaten down extensively over the past four years, but they finally appear to be on the road to recovery.

Among the few things untouched by the Obamacare rollout are the rising relative strength patterns of most health care stocks.

We like when we can find groups inside of broad themes, and these two industries are amongst the strongest in our work right now.

Sector weight changes during November were minimal. 

The S&P 500 gained 2.8% (price only) in November. Based on the valuation metrics presented below, the S&P 500 has 14% downside to its historical average.

The Major Trend Index saw little net change last month, dropping 0.02 to 1.15 over the four weeks ended November 29th.

Growth Stocks Lead YTD In All Three Cap Categories.

Considering the market’s strength, we are pleased with the performance of our short portfolios.

Small Caps are selling at a 20% valuation premium relative to Large Caps, using non-normalized trailing operating earnings.

Select Industries added exposure to Health Care Distributors and Multi-Line Insurance. Global Industries deactivated Media and purchased Health Care Services. 

The Major Trend Index remains positive and, as expected, our temporary ETF hedge was lifted. Our net exposure in both portfolios is now 64%-65%.