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Strategies & Market Trends : A.I.M Users Group Bulletin Board
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From: OldAIMGuy4/5/2025 1:04:39 PM
   of 18927
 
What did this last week's trading do to our v-Wave and MRI risk evaluations?



Those are pretty steep drops in the indexes! The v-Wave isn't quite ready to relax completely, however. The Proactive range is still a full standard deviation away.

The SignalPoint Market Risk Indicator (MRI) is constructed with components from Value Line and Barron's weekly data. There's some delay between the 'real world' and Value Line's data so it's not as instant as we might like. Further, when I constructed the MRI I used smoothing averages of each component to reduce the noise in the data. That, too, has an effect on how quickly the MRI responds to real world conditions. Here's how it looks with last week's data added in:


The S&P 500 Index declined rapidly and three of the four MRI components declined modestly. Even so, only the Speculation Index component of the MRI is in its Proactive range. The rest are neutral. The Relative Valuation component is now Neutral (just barely) for the first time since 12/08/2023. It's been in its Caution range continuously for well over a year. Like the v-Wave, the MRI is still more than a full standard deviation away from being Proactive overall.

I think it's fair to say that both risk indicators gave us adequate warning there was something hovering over Wall Street. Is it a Black Swan, or maybe it's a Fire Breathing Dragon? AIM has fired its first volley to start the process of inventory building. Not all components have fallen into their Buy target ranges but most have moved closer to those points.

AIM High and keep some Powder Dry,
OAG Tom

Buy from the Scared; Sell to the Greedy.....
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