Weekly Indicators Summary:
Secular Indicator (Years to decades)
In the Secular (years to decades) timeframe (Figs. 1 & 2), unless a mania comes along the long-term valuation of the market is simply too high to sustain rip-roaring multi-year returns.
Bull-Bear Indicator (months to years)
The Bull-Bear Indicator (months to years) is `positive (Fig. 3), indicating a potential uptrend in the longer timeframe.
Quarterly Trend Indicator (months to quarters)
The Quarterly Trend Indicator (months to quarters) is positive for Q1. Therefore, with internal unanimity expressed by all three indicators being positive, the U.S. equity markets are rated as Positive.
Short Term Indicator (weeks to months)
The shorter (weeks to months) timeframe (Fig. 4) is also positive.
Bloomberg columnist and market analyst Barry Ritholtz noted that last year’s technical state of the market was “just plain weird”. Although 2017 was very volatile news-wise, what with daily Trump tweets, North Korean missile tests and a steady stream of terrorist attacks around the world, U.S. stock market volatility was its lowest in fifty years. Normally, markets are regularly rocked by headlines from around the world, but Ritholtz found you have to go back to 1964 to find a year with as small a maximum daily change as 2017. In addition, the S&P 500 total return index finished up every single month in a row for the last 13 months, another multi-decade record. The disconnect between the news and the markets was very unusual indeed – “just plain weird”.