Market action over the past week saw the Positive MA for All Equity Funds 1040MU0 reverse from 86% to 78%, its first reversal lower since September 2021. This indicator measures the percentage of all equity funds tracked on the NASD Dorsey Wright platform that have their 10-week or 50-day moving averages above their 40-week or 200-day moving averages. The 1040MU0 tends to move to extreme levels, with highs often seen north of 90 and lows often below 10%. Seeing the indicator reverse lower from a high level is not a great sign given this coast-to-coast tendency, but not every reversal lower ultimately leads to readings south of 10%. As we can see from the chart below, the 1040MU0 does not change very frequently. It will often spend months at a certain level, and a full year can occur in a single column. Other periods have also seen the reading move below 80% only to reverse higher before reaching 70%. This happened twice in 2005, then also in 2013 and 2017. This is a time to be cautious and review your allocation or rebalance your allocation buckets. If you would like to learn more about the asset allocation and investment strategy, please give my office a call at 423-267-6858.
The views stated in this letter are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy
or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on
sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.