Market Overview

June Market Technical Forecast

Sector
Current Rating
PowerShares Base Metals ETF
SPDR Barclays High Yld Bond
SPDR Gold Trust
Vanguard Short-Term TIPs
Vanguard Total Intl Bond
SPDR S&P 500 ETF
iShares Commodity Indexed
Vanguard REIT
Vanguard Intermediate Bond
Vanguard FTSE Emerging Mkts
Vanguard FTSE Dev Mkts
Vanguard Global ex-US REIT
LEGEND:
Rated Overweight
Rated Neutral
Rated Underweight
Rating change this period

Changes this month:

The model is apparently basing its predictions on the thesis that interest rates will move up in June, following the 10 year rate drop from 2.6% in March to 2.1% now.  If the model is right, we should see base metals do better, and bonds do poorly.  Therefor, the technical model has moved Base Metals to overweight, and held bonds and REIT’s at underweight.

Interestingly, the S&P 500 weighting has been moved to neutral.  At this point, the model believes the market is essentially fairly valued with expections of normal return, with no big move in sight.  Early predictions for July show the S&P 500 weighting to jump to positive, but that is a very preliminary estimate.

 

Foreign markets are all still underweight, though should improve if rates go up. Preliminary July predictions move Emerging Markets to neutral.