The Catastrophic Stop model deteriorated in March but remains with a fully invested Core and Explore allocation entering April. The Core model overweighted the U.K., Germany, and Switzerland while underweighting Canada and China. The Explore model favored the Philippines, Thailand, Netherlands, New Zealand, Spain, and Mexico. The models combine macro, fundamental, technical, and sentiment indicators to determine opportunities and identify risks in an objective, weight-of-the-evidence approach.

With yields across the board declining in March, fixed-income sectors rallied. Entering April, the fixed income allocation strategy is overweight International Bond, U.S. Long-Term Treasury, TIPS, U.S. Investment Grade, and Floating Rate Notes. The U.S. Corporate, U.S. High Yield, and Emerging Market Bond sectors are underweight.

The sector allocation strategy’s message is mixed with overweights to Value sectors like Energy and Financials, as well as Growth sectors like Technology and Communications Services. Industrials, Consumer Discretionary, and Health Care are at underweight. The sector model uses sector-specific indicators to determine opportunities and identify risks in an objective, weight-of-the-evidence approach.

Strong YTD performance, higher total returns with lower volatility. Market climbs "Wall of Worry" amid recession fears, rising rates, inflation, and geopolitical risks. Value stocks rebound as quality companies regain favor. Portfolio changes include Mosaic and Nutrient acquisitions, Cigna and Aflac sales, and Schwab purchases. Sector weightings and valuation metrics remain favorable.

The Ned Davis Research Catastrophic Stop Loss Model has been fully invested since November 2022. Compared to its S&P 500 benchmark, it has remained on the correct side of the trend.

The Day Hagan/Ned Davis Research Smart Sector® for Global Balanced Portfolios was recorded on March 29, 2023.

Narrow leadership, comparable to what we have seen since the beginning of 2023, is worrisome. Bob Farrell once said, "Markets are strongest when they are broad, and weakest when they narrow to a handful of blue-chip names." Also, the small positive divergence in “Small-Cap land” must be built on!

The Day Hagan Technical Analysis was recorded on March 21, 2023. Art Huprich, CMT, shares his monthly chart jamboree. He discusses the banking sector and recent bank closures, the Bond markets, Equity Markets, the overall U.S. economy, Growth, Gold, Crude Oil, and other financial market topics.

During our recent technical analysis Chart Jamboree, we spent a lot of time addressing whether Wall Street is putting its head in the sand about the effects of quickly rising bond yields. Last week’s tape action and this weekend’s banking system news answered our question with a resounding “yes, it is.”

Year-to-date performance has been strong, outperforming the benchmark w/ lower volatility. Economic data surprises & rising interest rates have impacted market sentiment. Value sectors have underperformed, while tech stocks have shown strength. Overall, the portfolio continues to seek long-term outperformance through quality, profitability, and reasonable valuation.

Wall Street is focused on Fed Chair Powell’s semiannual monetary policy testimony today and tomorrow and the employment report Friday. With that backdrop, the short-term chart configuration of domestic equity market proxies remains neutral. From an intermediate-term perspective, with excessive optimism (sentiment) relieved, the weight of the evidence supports the prospect of the uptrend eventually continuing, as shown in last week’s Chart Jamboree.

The NDR Catastrophic Sell Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model improved in March and remained with a fully invested equity allocation recommendation.

With yields across the board rising in February, fixed income sectors suffered. Floating Rate Notes and International Investment Grade improved to overweight, while U.S. Investment Grade Corporate bonds dropped to underweight. Additionally, a rising U.S. dollar led to Emerging Market bond underperformance and an underweight allocation.

The sector allocation strategy continues to be positioned in early-cycle areas of the market. Value sectors like Energy, Materials, and Financials remain overweight, and Consumer Discretionary rose to a slight overweight allocation. Interest-rate sensitive sectors such as Consumer Staples, Real Estate, Communications Services, and Utilities are underweight, along with cyclically oriented Industrials and defensive Health Care. The sector model uses sector-specific indicators to determine opportunities and identify risks in an objective, weight-of-the-evidence approach.

The Day Hagan Technical Analysis was recorded on February 28, 2023. Art Huprich, CMT, shares his monthly chart jamboree where he discusses regime change, equity markets, inflation, interest rates, quantitative tightening, light crude oil, growth vs value, and other market topics.

Everyone is blaming the Fed, two nonvoting FOMC participants, and related economic reports for yesterday’s sell off and last week’s price swings, including a lot of stock-specific weakness. For me, it was the continuation of prevailing conditions: overhanging selling pressure (resistance) making itself felt (Figure 1) and upward trending interest rates. As Wall Street debates the issues, I expect further volatility and for equity market proxies continue to consolidate/pullback—SPX 4000+/- to 3950+/-.

Within the context of a supportive price pattern of a higher trough & higher peak (Figure 2), Wall Street appears frustrated as domestic equity market indices struggle with overhanging selling pressure (resistance). It’s not clear yet whether a consolidation pattern develops or if further downside probing occurs.

Day Hagan Market Update, hosted by Donald Hagan, CFA, was recorded on February 9, 2023. Don discusses a variety of financial market-related topics, including the driving forces influencing the global financial markets, the U.S. economy, NDR Economic Models, Inflation, Earnings Growth, the Information Technology Sector, Valuations, the U.S. dollar, Manufacturing, the NDR Catastrophic Stop model, and more.

The NDR Catastrophic Sell Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model remains with a fully invested equity allocation recommendation as the composite score improved toward month-end.

The NDR Catastrophic Sell Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model remains with a fully invested equity allocation recommendation, as the composite score improved toward month-end.