Our Models Are Back To Risk On, But The Market Remains Vulnerable

The title of our previous June 5th update was This Week’s Market Bounce: New Buying Opportunity Or Place To Further Reduce Risk?  
In that report, our focus was on the benchmark S&P 500’s (SPX) successful June 3rd test of underlying support at 2722, as we tried to determine whether that was a sustainable market bottom or just a “dead cat bounce“.

Here is the chart we displayed in that report:

Chart 1

At market inflection points like these, we often defer to Asbury Research’s quantitative models to point the way.  In this case, as shown in Chart 2 below, our Correction Protection Model (CPM) moved back to a Risk On (bullish) status on June 11th.
Chart 2

This reversed the previous May 7th Risk Off status, enabling us to avoid almost all of the 8% decline in SPX from the May 1st all-time high.
In addition, all of our Asbury 6 key market internals moved back to a corroborating Positive (bullish) status a day earlier, on June 10th as shown in Table 1 below, after previously being on a Negative (bearish) status since May 7th.
Table 1

As long as CPM and our Asbury 6 remain on a Risk On, Positive, status, our outlook on the US stock market will remain bullish.  However, we are also well aware of the fact — and so should our readers be — that the US stock market is in the 10th year of a bull market that historically only lasts about 4 1/2 years.
This means the market is severely over-extended — and vulnerable — so investors should consider keeping a much closer eye than usual on protecting their downside.
The video below shows how we have used Asbury Research’s analysis and strategy to manage investor assets, in real time, for our Asbury Research Management clients.

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If you like our approach to investing, please email or call 1-844-4-ASBURY (1-844-427-2879) for further information about individual managed accounts.
This communication is for informational purposes only. It is not intended as investment advice, or as an offer or solicitation for the purchase or sale of any financial asset.  No inferences may be made and no guarantees of profitability are being stated by Asbury Research LLC.  The risk of loss trading in financial assets can be substantial. Therefore, you should therefore carefully consider whether such trading is suitable for you in light of your financial condition.

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