Market Trend Signal, a member of Investiv, uses three proprietary algorithms to measure market Sentiment, Breadth, and Momentum. When all three market measurements are greater than 90, and they are stacked from top to bottom in the same order, a change of market direction will soon occur. As can be seen on the chart, only one of these requirements, Sentiment, is now in place. Both Breadth and Momentum have dropped from their higher readings a month ago. According to their formula, this indicates that the market has higher to go before there is a major trend reversal. Trend signals from these algorithms have been accurate back to 2000.
The movement of the Market during the last year has been historic in its relentless upward movement without any pause for normal corrections. To me it’s clear that abnormal activity by the Central Banks, the government’s ‘Plunge Protection Team’, or elsewhere, now control market movement. The Market will be bullish as long as ‘they’ choose. When they decide that the current ‘Trump Rally’ should correct, it will. Going forward, I will be using a variety of methods to hedge my portfolio. This may include increasing the percentage of cash held, balancing the portfolio with trades that are 50% long and 50% short, or using an option hedge such as outlined in my free e-book, Black Swan Protection for Your Stock Portfolio.
The annual membership at Market Trend Signal/Investiv is extremely inexpensive and I’ve found the daily signals on ETF’s and Stocks to be profitable. You can investigate further at Market Trend Signal.