– Market Risk improves but still in the 90th percentile.
– Volatility and oversold levels are about as about as good as it gets, but investors are still not as nervous overall as they have been at previous correction lows this cycle.
– Measuring animal spirits is more important that divining bear market or correction catalysts.
– Buy the Dip Gauge indicates the level of pessimism isn’t extreme given the market’s sharp decline.
– US Treasuries are the only major asset class still positive year to date, as February closes with coronavirus fears front and center.
– Growth and momentum stocks have held up better than value and dividend paying stocks thus far. Energy stocks have shed almost a quarter of their value ytd.
– Ironically, Chinese stocks are only down 3.9%. It’s the fourth best performing country in the world.
– In a sea of red, US Treasury prices were about the only thing that climbed last week. The ytd total return for 20Yr Treasuries is 14.4%.
%
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)
