– Corporate Insiders keep selling what retail traders are buying.
– Market hits overbought levels for the first time since November.
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World Wrap
– Big rebound for equities after closing January in the red. Commodities had a strong week as well on a nearly 9% jump in crude oil prices.
– Growth has a slight edge over value year to date, but the biggest out-performance story five weeks into 2021 is small caps over large caps.
– Emerging markets have opened a sizable performance gap over develop markets.
– After bottoming on January 5th, the dollar put in a short-term higher high this week, the first since last summer.
Market Outlook – Inflation pressures continue to build
– Market Risk Index climbs to the highest level since 2008.
– Monetary conditions soften on inflation pressures.
– ISM Price Index hits the highest level since 2011.
– Margin Debt to Corporate Net Worth bests the 1929 peak.
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Market Risk Index
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)
- Psychology 99.7%
- Monetary 87.2%
- Valuation 99.3%
- Market Trend 9.8%