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Category: Chart of the Week

Investor Risk Appetite Wanes

By John Del Vecchio and Brad Lamensdorf

As a sign a big bounce could be coming, investors have little appetite for risk. As the chart below from BofA Global Research shows, the percentage of investors taking higher than normal risks has plunged to nearly 2009 levels and are among the lowest this century.

Investor Risk Appetite Wanes

Meanwhile, the average cash position of fund managers has hit the highest level since the 9/11 terror attacks.

Investor Risk Appetite Wanes

While the market volatility may be far from over and lower prices could be seen in the future, the market sentiment is extremely bearish and indicators are pressed to the floor.

A bear market rally is overdue.

To learn more about how these indicators can help manage risk in your portfolio, book a call with Brad. You may book a call here.

DISCLOSURE: LAMENSDORF MARKET TIMING REPORT

Lamensdorf Market Timing Report is a publication intended to give analytical research to the investment community. Lamensdorf Market Timing Report is not rendering investment advice based on investment portfolios and is not registered as an investment advisor in any jurisdiction. Information included in this report is derived from many sources believed to be reliable but no representation is made that it is accurate or complete, or that errors, if discovered, will be corrected. The authors of this report have not audited the financial statements of the companies discussed and do not represent that they are serving as independent public accountants with respect to them. They have not audited the statements and therefore do not express an opinion on them. The authors have also not conducted a thorough review of the financial statements as defined by standards established by the AICPA.

This report is not intended, and shall not constitute, and nothing herein should be construed as, an offer to sell or a solicitation of an offer to buy any securities referred to in this report, or a “buy” or “sell” recommendation. Rather, this research is intended to identify issues portfolio managers should be aware of for them to assess their own opinion of positive or negative potential. The LMTR newsletter is NOT affiliated with any ETF’s.  Active Alts  is affiliated with Lamensdorf Market Timing Report. While LMTR uses charts from SentimenTrader, they do not have a financial arrangement with SentimenTrader  Past performance is not indicative of future results.

 

Bear Market Odds Model Surges

By John Del Vecchio and Brad Lamensdorf

A bear market prediction tool monitored by Goldman Sachs has surged in recent months to its highest level in decades. Here is a chart courtesy of SentimenTrader.com

Bear Market Odds Model Surges

This is a model outlined by Goldman Sachs using five fundamental inputs – the U.S. Unemployment Rate, ISM Manufacturing Index, Yield Curve, Inflation Rate, and P/E Ratio.

Each month’s reading is ranked versus all other historical readings and assigned a score. The higher the score, the higher the probability of a bear market in the months ahead.

When the model was 20% – 29%, the S&P’s average one-year return was +21%.

But when the model was 80% – 89%, that average return plunged to -2%. So the higher the model, the greater the chance for a bear market, or at least negative forward returns.

Time to up the hedges?

 

To learn more about how these indicators can help manage risk in your portfolio, book a call with Brad. You may book a call here.

DISCLOSURE: LAMENSDORF MARKET TIMING REPORT

Lamensdorf Market Timing Report is a publication intended to give analytical research to the investment community. Lamensdorf Market Timing Report is not rendering investment advice based on investment portfolios and is not registered as an investment advisor in any jurisdiction. Information included in this report is derived from many sources believed to be reliable but no representation is made that it is accurate or complete, or that errors, if discovered, will be corrected. The authors of this report have not audited the financial statements of the companies discussed and do not represent that they are serving as independent public accountants with respect to them. They have not audited the statements and therefore do not express an opinion on them. The authors have also not conducted a thorough review of the financial statements as defined by standards established by the AICPA.

This report is not intended, and shall not constitute, and nothing herein should be construed as, an offer to sell or a solicitation of an offer to buy any securities referred to in this report, or a “buy” or “sell” recommendation. Rather, this research is intended to identify issues portfolio managers should be aware of for them to assess their own opinion of positive or negative potential. The LMTR newsletter is NOT affiliated with any ETF’s.  Active Alts  is affiliated with Lamensdorf Market Timing Report. While LMTR uses charts from SentimenTrader, they do not have a financial arrangement with SentimenTrader  Past performance is not indicative of future results.

Bear Market Rally?

By John Del Vecchio and Brad Lamensdorf

The riskiest assets have seen a massive rebound.

Many stocks are up 20-30% or more off the recent lows in just a week.

Has the bottom been put in, or is this a bear market rally?

One of our favorite indicators suggests that it is time to add back hedges.

Aggressively.

The Short-Term Composite Indicators, courtesy of Investors Intelligence is now exceptionally overbought. At a level of 75.9, we are in nosebleed territory.

The indicator measures dozens of short-term and intermediate-term technical factors. The market is the most overbought it has been in months.

At a level that preceded pain the last time we got there.

While no indicator is perfect, we find that at extreme levels (both overbought and oversold) there are favorable risk/reward ratios. Now presents such a time to fade the market.

Bear Market Rally?

To learn more about how these indicators can help manage risk in your portfolio, book a call with Brad.

You may book a call here.

DISCLOSURE: LAMENSDORF MARKET TIMING REPORT

Lamensdorf Market Timing Report is a publication intended to give analytical research to the investment community. Lamensdorf Market Timing Report is not rendering investment advice based on investment portfolios and is not registered as an investment advisor in any jurisdiction. Information included in this report is derived from many sources believed to be reliable but no representation is made that it is accurate or complete, or that errors, if discovered, will be corrected. The authors of this report have not audited the financial statements of the companies discussed and do not represent that they are serving as independent public accountants with respect to them. They have not audited the statements and therefore do not express an opinion on them. The authors have also not conducted a thorough review of the financial statements as defined by standards established by the AICPA.

This report is not intended, and shall not constitute, and nothing herein should be construed as, an offer to sell or a solicitation of an offer to buy any securities referred to in this report, or a “buy” or “sell” recommendation. Rather, this research is intended to identify issues portfolio managers should be aware of for them to assess their own opinion of positive or negative potential. The LMTR newsletter is NOT affiliated with any ETF’s.  Active Alts  is affiliated with Lamensdorf Market Timing Report. While LMTR uses charts from SentimenTrader, they do not have a financial arrangement with SentimenTrader  Past performance is not indicative of future results.

 

 

Have We Seen The Low?

By John Del Vecchio and Brad Lamensdorf

The level of bearishness in the market has now reached an extreme level.

Historically, with so many investors leaning in the bearish direction, it has typically been a profitable time to accumulate stocks.

Based on the current Bull vs. Bear spread, and a 13-week forward outlook, 88% of the time the market has rallied. The average return is 8.9%

The chat below illustrates that the level of bears is among the highest in the last 10 years.

 

Meanwhile, while bearishness is at extreme levels, technology stocks are washed out. The percentage of issues below their 200-day moving average has now fallen below 20%. As a result, as illustrated in the chart below, technology issues are deeply oversold. The last time technology stocks were this oversold (COVID lows), the market experienced a substantial rally

The combination of too much bearishness and a deep oversold level is creating conditions for a massive bounce.

Have We Seen The Low?

To learn more about how these indicators can help manage risk in your portfolio, book a call with Brad.

You may book a call here.

DISCLOSURE: LAMENSDORF MARKET TIMING REPORT

Lamensdorf Market Timing Report is a publication intended to give analytical research to the investment community. Lamensdorf Market Timing Report is not rendering investment advice based on investment portfolios and is not registered as an investment advisor in any jurisdiction. Information included in this report is derived from many sources believed to be reliable but no representation is made that it is accurate or complete, or that errors, if discovered, will be corrected. The authors of this report have not audited the financial statements of the companies discussed and do not represent that they are serving as independent public accountants with respect to them. They have not audited the statements and therefore do not express an opinion on them. The authors have also not conducted a thorough review of the financial statements as defined by standards established by the AICPA.

This report is not intended, and shall not constitute, and nothing herein should be construed as, an offer to sell or a solicitation of an offer to buy any securities referred to in this report, or a “buy” or “sell” recommendation. Rather, this research is intended to identify issues portfolio managers should be aware of for them to assess their own opinion of positive or negative potential. The LMTR newsletter is NOT affiliated with any ETF’s.  Active Alts  is affiliated with Lamensdorf Market Timing Report. While LMTR uses charts from SentimenTrader, they do not have a financial arrangement with SentimenTrader  Past performance is not indicative of future results.

Market Ready to Bounce?

By John Del Vecchio and Brad Lamensdorf

The market is deeply oversold.

Sentiment is extremely bearish.

Recent price action in certain stocks suggests that selling is starting to get exhausted. The chart below shows the number of buying and selling climaxes using Point & Figure Charting.

The sell climaxes represent stocks that made a new low only to finish the week higher. They are in blue on the chart. The number of sell climaxes are now the highest since the COVID lows in 2020. That signal coincided with a huge run in stocks over the next year.

Market Ready to Bounce?

Obviously, with war breaking out in Europe, the market is digesting new information by the minute. Volatility is likely to remain high.

However, this signal does have significance. The number of sell climaxes may not predict the exact low, but it’s a reliable indicator to suggest that selling is exhausted.

At least for the intermediate term.

To learn more about how these indicators can help manage risk in your portfolio, book a call with Brad.

You may book a call here.

DISCLOSURE: LAMENSDORF MARKET TIMING REPORT

Lamensdorf Market Timing Report is a publication intended to give analytical research to the investment community. Lamensdorf Market Timing Report is not rendering investment advice based on investment portfolios and is not registered as an investment advisor in any jurisdiction. Information included in this report is derived from many sources believed to be reliable but no representation is made that it is accurate or complete, or that errors, if discovered, will be corrected. The authors of this report have not audited the financial statements of the companies discussed and do not represent that they are serving as independent public accountants with respect to them. They have not audited the statements and therefore do not express an opinion on them. The authors have also not conducted a thorough review of the financial statements as defined by standards established by the AICPA.

This report is not intended, and shall not constitute, and nothing herein should be construed as, an offer to sell or a solicitation of an offer to buy any securities referred to in this report, or a “buy” or “sell” recommendation. Rather, this research is intended to identify issues portfolio managers should be aware of for them to assess their own opinion of positive or negative potential. The LMTR newsletter is NOT affiliated with any ETF’s.  Active Alts  is affiliated with Lamensdorf Market Timing Report. While LMTR uses charts from SentimenTrader, they do not have a financial arrangement with SentimenTrader  Past performance is not indicative of future results.

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