NAAIM Speaks is monthly newsletter containing market insights and analysis from NAAIM member firms. This newsletter is designed to provide a plethora of market analysis, indicators, some occasional humor, as well as a summary of NAAIM’s proprietary Dynamic Asset Allocation Model and Managers Exposure Index. The report is for informational uses only and is not to be construed as investment advice.

The Key Questions

By: David Moenning, Heritage Capital Research

Published: 12.5.22

With the stock market putting up gains for a second consecutive month, the question of the day is if the recent rebound represents the beginning of a new cyclical bull market – or- simply another in a series of oversold bounces during the time of year when stocks typically move higher. Although there are always two sides to this type of argument and there is really no way to know the answer without a healthy dose of hindsight, I thought I’d spend my pixels on this fine Monday morning examining where things stand right now…

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Semis & Banks Offer Opposing Views

By: Paul Schatz, Heritage Capital LLC

Published: 12.7.22

It has been a crummy little stretch for stocks and other risk assets, having given back the entire Jay Powell pivot chat from last week.That was when Fed Chair Powell was interviewed by David Wessel and really just slightly came off his uber hawkish view and said that a 1/2% hike was coming next week. As I have been writing about for months the dollar and the 10-Year have come way off their highs which is good for stocks and a less aggressive Fed. The 2-Year is off the highs, but not comfortably so just yet…

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Barriers To Overcome

By: Ryan C. Redfern ShadowRidge Asset Management

Published: 11.25.22

The stock market environment might really be improving this time, but there are still a few barriers that need to be overcome. Even the bond market is acting better than it has all year. Since bottoming in early October, the major US stock market indexes have been mostly up, but not without some volatile days along the way. Both the S&P 500 and NASDAQ 100 had single days recently that were up over 5%. And while that sounds great, that is usually not “bull market” activity…

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The Message From the NAAIM Indicator Wall

By: National Association of Active Investment Managers

The NAAIM Indicator Wall provides a weekly update to a robust array of stock market indicators. The “wall” includes readings and explanations of indicators and/or models in the areas of price/trend, momentum, key price levels, overbought/sold readings, sentiment, monetary, economic, inflation, and market cycles.

This time, we’re featuring the Momentum Indicator Board , which is summary of key external factors that have been known to drive stock prices on a long-term basis.

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Link to NAAIM Indicator Wall

Note: The Indicator Wall is a benefit provided to NAAIM Members and is password protected. To obtain a temporary password, contact NAAIM at 888-261-0787.

Conditions Are Improving

By: Rob Bernstein, RGB Capital Group

Published: 12.5.22

Market conditions continue to improve. With the exception
of the Nasdaq Composite Index, all of the the stock market
indices here are approaching, or have penetrated,
their primary downtrend line, T1. This is a positive
development and could signal that the bear market that has
persisted for the majority of this year is abating…

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Danger Zone

By: Craig Thompson, President Asset Solutions

Published: 12.4.22

The Fed is raising rates in hopes of taming inflation by reducing demand. Every bear market advance this year is propelled by investors’ expectation that the Fed will pivot. And each advance gets squashed when the Fed reiterates its hawkish stance. The Fed has now made it clear that there is no pivot until there are clear signs of lower or falling inflation data. They are raising rates aggressively and that will definitely lower demand which lowers economic growth and corporate earnings. But it takes time for that to occur based on the lag effect of those rate increases. So…

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The NAAIM Dynamic Allocation Model

Designed to be a value-add benefit to membership, NAAIM offers a Dynamic Asset Allocation Model based on the NAAIM Indicator Wall of indicators and models. The overall objective of the model portfolio is to dynamically adapt to changing market environments and to keep equity exposure in line with conditions. The model targets a normalized allocation of 60% stocks and 40% Bonds.

Here is this week’s model allocation:

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The model has been run live on the NAAIM website for several years and has demonstrated the ability to reduce exposure to market risk during negative environments such as those seen in 2015-16 and 2018.

More on the Dynamic Allocation Model and Historical Readings

The NAAIM Dynamic Allocation Model is for illustrative and informational purposes only, and does not in any way represent an endorsement by NAAIM or an investment recommendation.

The Powell Pump

By: Sam and Bo Bills Bills Asset Management

Published: 12.2.22

As we have mentioned over the last couple of weeks, the convergence of the 200-day moving average and the down trend line that
began earlier this year were a logical place for the current rally to pause and, perhaps, turn back down. With Wednesday’s market
rally on Chairman Powell’s comments, we are now at that point. The big question will be if the market has any remaining
enthusiasm for more gains. Has Santa come early?

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Santa Rally?

By: Dexter P. Lyons Issachar Fund

Published: 12.5.22

Powell confirmed what everyone was thinking. He said small rate hikes are likely ahead and could come as soon as this month. However, Powell also said monetary policy will still be restrictive until the Fed sees real signs of lower inflation. The S&P 500 index market liked what he said and blasted through its down-trending 200 DMA line of resistance which now becomes support…

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The NAAIM Member Exposure Index

The NAAIM Exposure Index represents the average exposure to US Equity markets as reported by our members in the organization’s weekly survey. Note that many NAAIM members are risk managers and tend to reduce exposure to the markets during high risk environments.

Click To See the Current Exposure Index

NOT INVESTMENT ADVICE. The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Investors should always consult an investment professional before making any investment.

Tags: NAAIM, NAAIM Speaks, Stocks market analysis, Stock Market Analysis, Stock market, stock market indicators, David Moenning, Paul Schatz, Rob Bernstein, Ryan Redfern, Sam Bills, Bo Bills, Dexter Lyons, Craig Thompson, NAAIM Exposure Index, NAAIM Dynamic Allocation Model