Two additional S-TCTM Risk Warning Model members trigger risk-off signals

Key points

• Two additional sub-components of the S-TCTM-the NYSE 52-Week High-Low Ratio and the Important Cyclical Groups Divergence Model-have flashed tactical risk-off signals.
• Historically, these specific internal divergences precede sub-par market performance, highlighting elevated near-term downside risk across 1-to-6-month timeframes.
• Although the overarching Composite Risk Warning Model hasn't issued a formal alert due to unmet reset conditions, an elevated signal count of 40% warrants heightened vigilance and strict risk management.

NYSE 52-Week High-Low Ratio Risk-Off Model

The NYSE 52-Week High-Low Ratio model seeks to identify historical instances where new lows exceed new highs by a ratio of 1.5 or greater, specifically when the S&P 500 index is trading within two days of a 252-day high. The quantitative model issues an alert based upon the following strict parameters.

Signal Criteria

1. Condition 1 = NYSE New Lows / New Highs Ratio >= 1.5.
2. Condition 2 = S&P 500 is less than 2 days from a 252-day high.
3. Condition 3 = The NYSE New Lows / New Highs Ratio crosses above 1.0.
4. If Conditions 1-3 are met, a risk-off signal is i