For the second week in a row our equity risk index ticked up again, this time to a reading of 31.25%. In this case it was due to one of the many breadth indicators that we use that comes up with a signal based on a mix of NASDAQ up and down volume. After months and months
of horrible breadth we are finally starting to see some near signals in a few of our models. If the market can advance a bit more they will likely trigger, therefore causing the risk index to become more bullish.
Our models are made up of several different indicators. We look at trend, breadth, sentiment, liquidity, valuations, economic indicators, trend duration, and cycle analysis to put together the risk index for each of three different asset classes as well as for our individual trading models. While our trading involves a significant amount of discretion we have found that models are vital in ensuring consistent gains and even more importantly avoiding large losses.
If you are interested in learning more about what we do feel free to e-mail us at Editor@TheMacroTrader.com with “Trial” in the subject line to receive a free 1-month trial of our bi-weekly newsletter with weekly updates.
The Macro Trader