Market Risk Report as of March 8, 2021

From Chief Investment Officer Tom Veale,

“The only hold-out of our Market Risk Indicator, the Divergence Index, has fallen in with the others in giving a bearish signal. We have been watching weekly stock advances vs declines and felt the Divergence Index rising in risk profile, but it took last week’s trading to push it above its bearish threshold. Overall, this moved our Market Risk Indicator (MRI) to 46, up two points from the previous week. The MRI Oscillator checks in at +8 indicating significant upward risk pressure. A reading of 46 is an extremely cautionary signal.

This is the 33rd week of bearish overall MRI readings and comes after a week of confused trading. The NASDAQ Composite and NYSE indexes took different directions last week. Advancing stocks were roughly half of the decliners on the NASDAQ while almost the reverse was seen on the NYSE. New 52 Week Lows soared on both exchanges after weeks of very low numbers. So far, deterioration of stock prices seems to be in very narrow areas of the market. For instance, Renewable Energy was hit particularly hard last week. At the same time Utility stocks perked up after being out-of-favor for some time.”

Best regards,

Tom Veale