– Market Risk Index climbs to 91.4%, surpassing Jan 2018 peak. Reducing equity allocation recommendation to 60% of maximum.
– Psychology deteriorates further – AAII bullishness breaks out to highest levels since Jan 2018.
– ARMS Index hitting levels that have halted rallies over the last two years.
– …and lots of charts.
– US Equities finished 2019 with the best return since 2013, a snap-back from the poor year stocks had in 2018. Stocks are up 12.5% from their Jan 2018 peak.
– Tech led all sectors closing over 50% higher in 2019, the best yr for the sector since 2009. Large Growth & Quality outperformed all other styles & factors.
– International equities closed 2019 over 20% higher, lagging US equities. International equities still have not surpassed their 2007 all-time high, nor their 2018 high.
– Although 20Yr Treasuries had a rough qtr, down more than 4%, long duration Treasuries still managed to edge out US corp bonds for the yr – up 15.1% vs 14.5%.
%
Market Risk Index scales from 0 to 100%. Higher readings correspond with higher risk markets. Scores below 25% are bullish. Scores between 25-75% are neutral, and scores above 75% are markets vulnerable to major drawdowns.
Model Category Readings (Percentiles)
