The DH Smart Value Portfolio continues to invest in companies producing excess returns through positive economic profitability, supported by solid balance sheets (quality), significant cash generation (profitability), and trading with considerable margins of safety (valuation). We believe these factors will continue to provide rational opportunities for the foreseeable future.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity & equity-related fixed-income markets. The model improved in January & entered February with a fully invested allocation recommendation. If our models shift to bearish levels, we will reduce exposure to fixed-income sectors with high correlations to equities.

Between early December 2024 and early 2025, we highlighted a negative Advance-Decline Line non-confirmation and expected price volatility to continue. We still feel the same. Equity market price volatility will continue deeper into Q1, at a minimum.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model (Figure 1) improved in January and entered February with a fully invested equity allocation recommendation. We will raise cash if our models shift to bearish levels (below 40% for two consecutive days).

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model (Figure 1) improved in January and entered February with a fully invested equity allocation recommendation. We will raise cash if our models shift to bearish levels (below 40% for two consecutive days).

The Catastrophic Stop model held steady at 72.9%, the same level as last week. On average, the model’s technical indicators remain bullish, and the external indicators are neutral.

Internal measuring tools have moved to be supportive, yet resistance stands, and a negative Advance-Decline Line condition remains. Meanwhile, the Catastrophic Stop Loss model and U.S. High Yield Index OAS-Credit Spreads support the S&P 500’s uptrend.

The Catastrophic Stop model increased to 72.9% from 65.9% last week. Internal measures (price-related indicators) are bullish, and External measures (indicators calling the operating environment) are neutral.

Stocks bounced sharply higher once support was tested and held, further supported by oversold conditions and relatively favorable inflation reports. Internal measuring tools moved sharply in the right direction. Broader participation and follow-through are now needed.

The Catastrophic Stop model increased slightly to 65.7% from 60.7% last week. Internal measures (price-related indicators) are bullish, and External measures (indicators calling the operating environment) are neutral.

Worries over fiscal discipline, immigration policies, the recent strong employment report, and several other issues drove the 10-year U.S. Treasury yield above 4.80%. When the Fed started lowering interest rates on 9.18.24, the 10-year yield stood at 3.70%. Who’s missing what?

The Catastrophic Stop model declined to 60.7% from 67.9% last week as the MSCI ACWI Breadth Factor reverted to a sell signal. The Internal Composite is bullish, and the External Composite is neutral.

The DH Smart Value Portfolio continues to invest in companies producing excess returns through positive economic profitability, supported by solid balance sheets (quality), significant cash generation (profitability), and trading with considerable margins of safety (valuation). We believe these factors will continue to provide rational opportunities for the foreseeable future.

The oft-discussed price volatility, in both directions, came to the forefront as 2024 ended and 2025 began. With the ongoing global and domestic political backdrop, “tariffs, taxes, inflation,” negative non-confirmations, and interest rates, the odds favor it continues.  

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity and equity-related fixed-income markets. The model held steady in December and entered January with a fully invested allocation recommendation.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model held steady in December and entered January with a fully invested equity allocation recommendation. We will raise cash if our models shift to bearish levels (below 40% for two consecutive days).

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model (Figure 1) held steady in December and entered January with a fully invested equity allocation recommendation. If our models shift to bearish levels (below 40% for two consecutive days), we will raise cash.

The Catastrophic Stop model improved to 67.9% from 60.7% last week due to the MSCI ACWI Breadth Factor shifting to positive. The Internal Composite is bullish, and the External Composite is neutral.

The Catastrophic Stop model held steady at 60.7%, the same reading as last week. The Internal Composite is bullish, and the External Composite is neutral.

The Catastrophic Stop model declined to 60.7% from 72.9% last week due to High-Yield and Emerging Market bond breadth shifting from bullish to neutral on 12-18-2024. The Internal Composite is bullish, and the External Composite is neutral.