Tactical Composite Trend Model Update for Apr 22

Key points:

• The composite risk warning model count falls to zero
• A new signal triggered in the composite confirmation model
• I'm monitoring the composite washout and thrust models for signs that the correction window is closing

Data as of 4/21/22. 

Tactical Composite Trend Model - Bullish 

The TCTM maintains a cautious bull status as the recession and long-term trend models remain in a favorable position despite the composite risk warning model signal. Now that the market has corrected, I will be monitoring the washout and thrust models for indications that the countertrend move in the market is over. 

The TCTM is not a pure black-box model that says we should be all in or out. And it should act as a complementary tool to your research process.

To see any published research about this model, click here.

1. Long-Term Trend Model - Bullish

The long-term trend model remains in a bullish position. Annualized returns are favorable when the model is positive.

2. Composite Risk Warning Model - Neutral

The composite count has now fallen to 0% with the expiration of the AD line divergence model.

Please click on the following links if you would like to read the notes for the components that triggered the risk-off signal.

1. New Lows Spike Model
2. 52-Week Low with Percent above 200-Day Model
3. New 52-Week High Low Ratio Model
4. Advance-Decline Line Divergence

To see published research about the risk warning model, click here.

3. Composite Recession Model - Neutral

While we've seen some less than robust economic data of late, I would not expect any changes to the recession model count for now.

4. Composite Washout Model - Neutral

After increasing to as high as 30%, the composite washout model signal count has fallen to 10%.

5. Composite Thrust Model - Neutral

I will be monitoring the thrust model for a buy signal. The signal count increased to 30%, with 3 new alerts triggering since 2/2/22.

1. Percent above 10-day average reversal on 2/2/22
2. Breadth Thrust on 3/28/22
3. Rate of Change Thrust on 3/28/22

The following table provides a historical perspective for components within the thrust model that have triggered a signal after a 10 to 20% correction. Two members with the highest hit rates have not initiated a signal. I would like to see the percent above the 50-day model fire an alert as it has an excellent long-term track record.

6. Composite Confirmation Model - Neutral

The composite confirmation model signal count remains low. Once the current correction ends, I would watch this model as the signal count should increase as the recovery develops. The CCM typically lags during a rally as the components are big-picture algorithms that take more time to trigger.

7. Composite Master New Bull Market Model - Neutral

The composite master-bull-market model signal count remains low. Once the current correction ends, I would watch this model as the signal count should increase as the recovery develops.

Risk-Off Composite Model - Neutral

The risk-off composite model is an excellent secondary tool for managing market exposure with the TCTM Risk Warning Model. Please click on the following link for a note on the model. Click here.

After triggering a risk-off signal in December, the composite count has fallen to zero with the expiration of all alerts.