Market Risk Report as of March 22, 2021

From Chief Investment Officer Tom Veale,

“There aren’t a lot of ways to put a positive spin on SignalPoint’s Market Risk Indicator being bearish for 35 weeks straight. How about this? In just 17 more weeks it will have been bearish a whole year! The MRI comes in at 46 this week, up a point from a week ago. The MRI Oscillator rose to +4 indicating modest upward risk pressure.

All four MRI components rose slightly in risk profile this week with three bearish and one neutral. The persistence of bearishness across market valuation, measured speculation, investor sentiment and the continuing surge in new issues coming to market has gone on longer than any time since starting to collect this data in January of 1982. For a company’s stock to make Value Line’s “Best Performers, latest 13 Weeks” list it needed to have risen over 84%. Compare that to the qualification to be listed on the “Worst Performers” list of a drop of just 12% over the same period and we see speculation in its rawest form. The other side of this coin is that investor sentiment doesn’t seem to recognize or acknowledge much market downside risk. Throw in the Dilution Pollution of lots of new stock listings and we’ve covered just about all major sources of speculative activity.

Considering the above, we continue to find opportunities to capture profits while moderating portfolio risk. Our focus has been to contain risk buildup while searching for profit opportunities. The bond market had peaked during the last 12 months and declining bond fund prices have cracked open the door to recycle some cash back into higher yielding shares. This trend, if it continues, will improve client income from those strategies holding income ETFs.”

 

Best regards,

Tom Veale