The Lights Are Blinking – Last Call For The March Rally?
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Data Beats Opinion Every Time…
Our theme for the previous two Stock Market Update & Asbury Investment Management Videos, from August 15th and August 6th, has been “following the money” rather than someone’s (including your own) opinion about how under- or over-valued the stock market may be. We do this via our two tactical models — the Correction Protection Model (CPM) and the Asbury 6. Quantitative, completely data-driven models like these are especially useful, and effective, when the stock market seems to be completely disconnected from the economy as it is right now.
Both Tactical models remain on an early July Risk On / Positive signal so — as improbable as it may be — market internals still support continued higher prices on a near term, Tactical basis.
In the previous two Stock Market Update & Asbury Investment Management Videos, we focused on the Asbury 6. In this issue, we take a closer look at our Correction Protection Model (CPM). CPM is our own proprietary, defensive model for the S&P 500 (SPX). CPM is binary: it is either Risk On (increasing market exposure) or Risk Off (decreasing market exposure). CPM was designed to be a wealth preservation tool, protecting investor assets during potentially dangerous market conditions while also taking advantage of the market’s historical upward bias.
Chart 1 below highlights CPM’s Risk On and Risk Off signals since 2019. More information about CPM is available on our website by Clicking Here.
…But History Still Matters
The red highlights in the lower panel of Chart 2 below show that, through Friday, SPX is now 13.8% above its 200-day MA and essentially at the 14.0% area that has historically coincided with or led many of the most significant US broad market peaks of the past 20 years. For perspective, the 34.0% decline in SPX during February-March was preceded by a peak of 11.6% in this metric on Feb 12th.
The collective message of these charts is that market internals remain positive and, until that changes, we will continue to take what the market gives us. However, the next time our models shift to Risk Off, the market’s historic over-extended condition warns that a larger-than-normal decline will be coming.
Our latest video below shows how we have navigated these recent market conditions in real time.
Asbury Investment Management (AIM): Our Latest Video
Asbury Research Ideas, Expertly Managed
Here is our August 28th Video Review, which explains how we have recently utilized Asbury Research’s market analysis and investment ideas to professionally manage client portfolios.
AIM offers a unique approach to investment management that is data driven, dynamic, and solely based on the currenttechnical condition and quantitative risk/reward profile of the financial markets.
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