The model score today is -53, another slight new low for the move.  This is the lowest reading since mid-2015.  This means that the market is deteriorating internally on all down moves while only improving very slightly on any rally.  Not encouraging as yet.  While the market is now deeply oversold, rallies even to 2800 would probably have very little effect on the spreads and the model score.  We are in a very delicate position

 

Unless price first rallies and then stabilizes at much higher levels, the asset spreads utilized in the model suggest this will be a temporary reprieve, with much worse to come eventually.

 

Owners of CNP, CAN, M, KIM & NDAQ should examine whether it is worth holding these stocks, as the position is rapidly deteriorating in those names.

 

Our asset allocation is today still 100% TLT and 0% SPY.  The monthly model gave us the sell signal at October month end.  All 3 models are now aligned in risk off.  The fact that the model keeps on being negative into price rallies is a potent tell of what might be coming soon.  I would advise extreme caution and lightening up of individual names which are under-performing the market into rallies.

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