Thursday, May 2nd, 2019

July is the next danger period for US equities

Our models are actually very simple but they often look like a black box to outsiders. We have three separate indicators which all suggest that July will be a dangerous period for US equities. All of them are based on the way in which our models have behaved over the last 24 years. Of course, things may be different this time. We will just have to wait and see.


Thursday, April 18th, 2019

Managing risk on the downside

Equity bears are capitulating. The priority is to protect their portfolios from further underperformance by getting closer to their benchmark equity weight. Our models have always shown that the worst sample periods for our process are between 29-35 weeks. The behavioural explanation would be that fund managers are allowed to be wrong for two quarters in a row, but not for three. Cutting a losing position during the third quarter of the mistake tends to be more damaging than doing it early in the second.


Wednesday, February 20th, 2019

US Industrials may give us a sign

We detect signs that the rally in global equities is losing momentum, but we could be wrong, so we are going to do nothing for the next week or two. There are signs of recovering risk appetite in EM Equities and in credit, but not in equity sector selection. Our global equity vs fixed income model is at a critical chart-point and we will look to US Industrials to provide confirmation of that message, whatever it is, whenever it comes.