The Absolute and Relative Trend Score Indicators use a weight of the evidence framework by aggregating ten trend-following indicators to deliver a comprehensive composite score for trend evaluation. Scores range from 0 (weakest) to 10 (strongest).

Macro Index Model: The U.S. stock market and the U.S. economy generally move in the same direction over the long term. However, significant declines of 30% or more in the stock market are often contextualized by macroeconomic deterioration. While macroeconomic conditions do not always deteriorate before a 30% decline begins, the bulk of such declines typically occur after significant macroeconomic deterioration has taken differentiate between temporary economic slowdowns and genuine macroeconomic issues, we have developed the Macro Index, which synthesizes 11 diverse economic indicators to provide a comprehensive assessment of the current state of the U.S. economy. These indicators include:

Bear Market Probability Model: This is a model outlined by Goldman Sachs using five fundamental inputs - the U.S. Unemployment Rate, ISM Manufacturing Index, Yield Curve, Inflation Rate, and P/E Ratio. Each month's reading is ranked versus all other historical readings and assigned a score. The higher the score, the higher the probability of a bear market in the months ahead. As outlined in a report from September 5, 2018 (see the archives), when the model was 20% - 29%, the S&P's average one-year return was +21%. But when the model was 80% - 89%, that average return plunged to -2%. So the higher the model, the greater the chance for a bear market, or at least negative forward returns.

SPY 4 week high %: This shows the percentage of stocks in the named exchange-traded fund (ETF) that are currently trading at a 4-week high. This is a breadth figure, so we can see the participation among members of the fund. Oftentimes at turning points, the underlying breadth will diverge positively (at bottoms) or negatively (at tops) from the index. It is also useful to monitor extremes in the breadth figures. When so many components of an index are doing well or poorly, we usually see the index make a counter move in the days, weeks or months following the extreme.

SPY 4 week low %: This shows the percentage of stocks in the named exchange-traded fund (ETF) that are currently trading at a 4-week low This is a breadth figure, so we can see the participation among members of the fund. Oftentimes at turning points, the underlying breadth will diverge positively (at bottoms) or negatively (at tops) from the index. It is also useful to monitor extremes in the breadth figures. When so many components of an index are doing well or poorly, we usually see the index make a counter move in the days, weeks or months following the extreme.