Friday, November 20, 2015

Overall Market Meter Changes from "Neutral" to "Slightly Bearish"

Today, the Covered Calls Advisor recalculated the current values for each of the seven factors used to determine the "Overall Market Meter" rating.  The result is that the Covered Calls Advisor's current market viewpoint changes from Neutral to Slightly Bearish.  A graphical representation of the "Overall Market Meter" is shown in the right sidebar on this page.  Until today, the indicator had remained Neutral throughout 2015.  This proved to be an accurate forecast for the first 11 months this year since the benchmark Russell 3000 Index (ticker symbol IWV) has been neutral so far this year with a net increase of 3.06% (from a closing price of 120.68 on Dec 31, 2014 to 123.74 at today's market close).   

The seven factors used can be categorized as:
- macroeconomic (the first two indicators in the chart below),
- momentum (next two indicators in the chart),
- value (next two indicators), and
- growth (the last indicator).

The current Market Meter average of 2.71 (see blue line at the bottom of the chart above) is in the Slightly Bearish range (Slightly Bearish range is from 2.25 to 2.99). 

As shown in the right sidebar, the covered calls investing strategy corresponding to this overall Slightly Bearish sentiment is to "on-average sell 1% in-the-money covered calls for the next options expiration month".

Your comments or questions regarding this post (or the details related to any of the seven factors used in this model) are welcomed. Please email me at the address shown in the upper-right sidebar.

Regards and Godspeed,