This is an abridged version of our Daily Report.
A Goldman Sachs model incorporating five fundamental factors shows a high risk of an imminent bear market in stocks.
When the model reaches its current level, the average S&P 500 return over the next six months was negative 6%.
No gains for grains
Combined sentiment toward corn and soybeans has been among the lowest since 1991.
When a 5-day average of the Optimism Index for both contracts was this low, forward returns in the DBIQ Diversified Agriculture Index were decent, especially shorter-term, and soybeans tended to do better than corn.
Utilities were the best-performing sector on Wednesday with more than a 1% gain. Tech was the biggest loser, with more than a 1% loss. Since the inception of XLU and XLK, this has happened 64 times, and it was mildly negative for stocks in the short-term.
For access to the full report, indicators, charts, screens, and Backtest Engine, log in or sign up for a free 30-day trial today.
The post titled Goldman Model Predicts Trouble As Grains Get Hit was originally published as on SentimenTrader.com on 2018-09-06.
At SentimenTrader.com, our service is not focused on market timing per se, but rather risk management.
That may be a distinction without a difference, but it's how we approach the markets. We study signs that suggest it is time to raise or lower market exposure as a function of risk relative to probable reward. It is all about risk-adjusted expectations given existing evidence. Learn more about our service , research, models and indicators.
Follow us on Twitter for up to the minute analysis of market action.