Investors Weekly Update

August 10, 2019

Our equity/bond model - This long-term reliable investing model provides investors with simple decision making in the markets:

  • When the model favors stocks, investors should overweigh in equities for maximum growth.

  • When the model favors bonds, investors should overweigh in bonds for safety.

Our benchmark S&P500 is on a buy signal.

Oil sector is on a major sell signal.

VIX – volatility index

VIX is up and major indexes are down.

It’s been a few years since we looked at this long-term chart between the benchmark S&P500 and the transportation index. According to the “Dow theory”, the markets are in the process of a major top when there is a divergence between these two indexes.

We have witnessed and charted these divergences over the past twenty years:

2000 – resulted in a 50% correction

2008 – resulted in a 60% correction

2015 – only a 10% pullback

2019 - ?

Summary

The long-term signal on the broad market is up.

However, the current investing model favors bonds, therefore, investors should continue to overweigh with long bonds or bond ETFs for safety.

The Dow Theory suggests that a pullback or even substantial correction can materialize in coming weeks and months. Caution is advised.

Disclosure

We do not offer predictions or forecasts for the markets. What you see here is our simple investing model which provides us with simple investing decision making. Entry points and stops are provided in real time to subscribers, therefore, this update may not reflect our current positions in the markets. www.simplyprofits.org

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The Fourth Coinage Act of 1873 embraced the gold standard and demonetized silver, known as the “Crime of 73”

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