August 2017 Market Forecast

Sector
Current Rating
Vanguard FTSE Dev Mkts
 
Vanguard FTSE Emerging Mkts
 
SPDR Barclays High Yld Bond
 
SPDR Gold Trust
Vanguard Short-Term TIPs
 
Vanguard Intermediate Bond
 
Vanguard Total Intl Bond
 
SPDR S&P 500 ETF
Vanguard Global ex-US REIT
 
LEGEND
– Overweight
– Neutral
– Underweight
– Rating Change This Period


This month, only developed International markets remained overweight, with the US Stock market predicted to have a slow month and consolidate its July gains.  Gold was also downgraded to neutral after a 2.3% gain in July.  International REITs continue to be listed as underweight for the fourth straight month.  During this period, the prediction as has been wrong each month, so take this free advice for what it is worth.  

Early indicators show little change for September, but that can change at any time.

July Technical Forecast

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

Lots of changes this month, as the technical model code was refactored, revealing some bugs and opportunities for optimization.  The biggest news is the technical model moved the S&P to overweight, and in ‘buy the dips’ mode.  Preliminary August figures show the S&P 500 returning to neutral.

Developed Foreign markets also moved to overweight, as did Gold for the first time in awhile.

Global REITs remain in the underweight camp – the model has been wrong on this one for the last few months – maybe now it will get it right.

June 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
  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 model has moved Base Metals to overweight, and held bonds and REITS 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 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.