As we see it, one of our primary roles at Asbury Research is keep our subscribers from losing money in the market. We do this by analyzing market conditions every day because, most of the time, you can spot emerging trouble before it becomes apparent in the major indexes. That is, if you know where to look.
One of the ways we do this is via our Asbury 6, six key market internals.
We think of the Asbury 6 as the cylinders of a six cylinder car. When all six are firing, the car continues moving down the road, over hills and around obstacles. However, if these cylinders stop functioning, then one-by-one, little-by-little, the car loses its ability to continue moving forward.
The following are recent examples of how this metric works in both Risk Off and Risk On Environments.
The table below shows that, as of October 10th of last year, four of our Asbury 6 had moved into negative territory to indicate an emerging Risk Off Environment. (Note: The Asbury 6 is updated daily and is accessible to subscribers in our password-protected Research Center.)
This negative shift in stock market internals, which occurred just 13 days after the S&P 500 (SPX) set its all-time high on September 21st, preceded a 438.00 point, 16% decline by SPX into the December 26th lows.
More recently, on January 9th, the table below shows that four of the Asbury 6 moved back into positive territory to indicate an emerging Risk On Environment. The S&P 500 has since risen by 123.00 points or 5%.
The final table below shows that, as of today, all six of the Asbury 6 are in positive territory.
As long as the Asbury 6 remain positive, the current rally will continue. If they start to turn negative, however, it will indicate the market’s vulnerability to another decline. Moreover, the longer the Asbury 6 remain negative, the longer the decline will last.
And, most important, based on past performance, our clients should know that the next market decline is coming before it has a chance to do serious damage to their portfolios.
Asbury Research subscribers can view our latest research on the US stock market, market sectors, US interest rates, ETFs and commodities, as well as a table with our current picks in US stocks, ETFs, and global indexes, by logging into the Research Center via the big gold button in the upper right corner of the screen.
For asset management, please visit the Asbury Investment Management (AIM) website.