Leuthold: it's "into the dumpster"

David_Snowball

Leuthold's summative metric is the Major Trends Index (MTI), which is a sort of weighted average of 140 individual metrics that their research says is predictive of the market's prospects. In the past week, the previously negative reading (-2) has worsened as the market's technicals (measures such as advance/decline lines and breadth of movement) have deteriorated. The MTI is now at its worst possible reading, -3.

Here's their summary:

The Major Trend Index slipped another notch to -3 in the week ended October 20th, thanks to a two-point breakdown in the Technical category. All four of the MTI’s factor groupings are now negative, supporting a defensive stance toward the stock market.

Leuthold tactical portfolios—including the Core Fund, Core private accounts, Core ETF, and Global Fund—are all positioned with net equity exposure of 43%.

On a short-term basis, it’s troubling that a market setback as internally deep as the current one hasn’t resulted in more improvement in the Sentiment work. The “wall of worry” accompanying much of the 2023 market action has morphed into a “slope of hope.”

On a long-term basis, it’s worrisome that S&P 500 valuation measures still look so high, despite the index having gone nowhere in the last 29 months. But there’s a silver lining to this year’s incredibly narrow market action: The “average stock” in our Leuthold 3000 universe has sunk to even lower valuation levels than seen at last October’s bear market lows.

Across the 40 inputs to the Technical category, there were zero upgrades and nine downgrades.

In the last three months of decline, LCORX has lost 50% of what its peers have; over the past three years, its made 250% of what they have (per Morningstar).

The LCORX homepage, which is moderately interesting.

WABAC

Across the 40 inputs to the Technical category, there were zero upgrades and nine downgrades.

Technical always reminds me of Ruykeyser's elves.

Old_Joe

"Technical always reminds me of Ruykeyser's elves."

hank

Old_Joe said:

"Technical always reminds me of Ruykeyser's elves."

And he fired one of them, Gail Dudack, near the peak of the ‘99-2000 NASDAQ bubble because she’d been bearish a long while. Wouldn’t go along with the otherwise bullish “elves” as I recall. A stain on his otherwise commendable show.

Does anyone remember a frequent poster here named @Flack? Technical analysis was his bread and butter. Always enjoyed the unique perspective he brought to the board.

catch22

@hank Yes, and @Flack had this last post at February, 2018 and his/her last visit to this site was November, 2018; without a post.
https://www.mutualfundobserver.com/discuss/discussion/39024/because-nobody-knows-what-s-going-to-happen-next

BaluBalu

@David_Snowball,

Thanks for the post. Any reason you did not want to post this as an update to your Oct 12 thread OP?

Also, have you looked into CRDBX, another tactical fund shop? Would love to get your thoughts on this shop and the fund. Interesting that these guys continue to find their signals in the long side - one can see that from the fund’s price action. Not for the faint of heart for sure.

Thanks.

hank

Wonderful thread linked by Catch from 2018 and remembrance of Flack. Thank’s @Catch22. Lots of laughs there. And I did remember there was a bit of “tension” between him and @MJG …

Old_Joe

Yes, ol' MJG was a trip. I actually do miss him, though. Monte Carlo calculators- the answer to everything!