Trends within the markets are often the most reliable indicators of upcoming asset price movements. From Larry Livingston to today’s data driven world, “the trend is your friend” has made and saved many investors money. In this weekly report, Global View Capital Management, along with its research partners, lay out some of the most important market trends for investors.
The markets continue to make new all-time highs with Money Market ranked at 48 on the Relative Strength scale. The bulls are still in charge and there’s still momentum even though the market is overbought from a technical basis.
The opportunity for fiscal policy is driving investors to vote with their money even though our new President may be viewed as making some amateur mistakes in execution of the immigration policy. Have faith he’ll get it right whilst the media hyper-focuses on extremists. We know from history that extremists don’t have sustainable solutions and usually offer America a dead end. What they do create is a wild fire of anger and division which can only be de-escalated by not fueling the flames.
Most all of the strategies on the platform are in a “Risk-On” mode except our L/S strategies that are in cash. The S&P 500 Alpha-Enhanced which is a shorter-term trending system has a behavior that looks for a dip, moves in and exits to take profits, resulting 15-25 trades annually. It is only 60% correlated to the S&P 500, so patience is needed in current conditions. The US Equity Alpha-Enhanced is up over 8% YTD and is moving toward an entry point. This strategy is also only 60% correlated to the Nasdaq 100, however, since it is a 2x beta strategy, a lot of ground can be made up after it moves back in.
We have long encouraged strategy diversification so your investors have some long-only exposure to alleviate “loss-of-opportunity” angst.
Market Trends Rankings
Below is our weekly Market Trends Quickview. This report tracks the asset classes that are doing best and worst. Please sign up at the top of the page to receive this report in your email box each Tuesday afternoon.
The money market investment option is still ranking about in the middle of the pack. This means that there are substantial investment opportunities for better gains than the money market. It did rise a bit in the past week, which does signal some skepticism of this market.
When the money market ranks very high, it means that risk has risen and the money market is a more desirable option for risk management purposes. Investment categories that rank below the money market option are generally not advised to be invested in.
Contact us with any questions or to discuss how our approach to tactical asset allocation can help you control risk and take part in opportunity.