An S-TCTM Risk Warning Model member triggers a risk-off signal
Key points
- The percentage of S&P 500 components hitting 252-day lows spiked above 7.7% while the broader index remains near its highs.
- Historically, this specific New Low Spike Model identifies a skewed risk profile where severe drawdowns outpace outsized gains, leading to sub-par forward returns over a 1-to-6-month window.
New Low Spike Model
As we've seen of late, a low level of new highs can signal internal rotation. It's not necessarily an outright negative for the market. While the percentage of new highs will almost always start to shrink and diverge from an index making new highs around inflection points, new lows are the most critical time series to monitor in a market uptrend. If an index is advancing and new lows are expanding, market breadth is unhealthy, and one should take note.

The New Low Spike Model utilizes the percentage of S&P 500 members registering a new 252-day low.
Signal Criteria
- Condition 1 = The percentage of S&P
