Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 1 This private letter tries to provide somewhat objective research not investment advice

April Will lsquoSell in Mayrsquo kick in early Statistically the second half of the year is weaker for stocks than the first half This trend has been valid and well known for many decades ndash so much so that it probably has become a self-fulfilling prophecy For the past few years the summer sell-off has started even earlier with speculators lsquojumping the gunrsquo It looks like that is the case this year As a result I am running my forecasting engine early Between now and the end of October my forecasting models anticipate a 7 increase in the market as measured by the Value Line Arithmetic Index The likelihood of achieving at least some gain is 76 The chance of a temporary drop of at least 8 between then and now is 53 -- a little higher than average My econometric models of the stock market are based on just a few basic macroeconomic variables tied to the US economy and stock markets They are far from omniscient The best thing the market has going for it is that the economy is still weak leaving room for recovery The negatives are that the market is no longer underpriced there is less room for recovery and the sluggish second half of the year is upon us Personally I am hoping that a correction in the near term will present a buying opportunity

How did my forecasts work out in the past half year Rather close Last October the model forecast a terrific 19 gain up to the end of May but seeing the looming lsquofiscal cliffrsquo I personally discounted that to a 10 gain As I write this the gain to-date has been 11 in the Value Line Arithmetic Index Irsquoll call that a win

Market Valuation Measures Several measures see the stock market as somewhat undervalued However the indicator Warren Buffet likes best says it is slightly overvalued I favor the undervalued argument for the next six months

Economic Indicators

Only about 15 of US economists expect a second round of recession in the US Most Composite Leading Economic Indicators anticipate slow growth rather than recession for the US Business profits should continue to be high as debt costs are at the lowest relative levels in several hundred years and businesses already are lean Though profits may stay high there isnrsquot much room for quick expansion Too bad thatrsquos what the market likes

Trader Signals - Fast I have finally found a couple of indicators that appear to lead the market by a month or so No guarantees By the time you read this these short term signals may give an entirely different picture Trader Signals ndash Slow The long running ldquoSecond Great Contractionrdquo will likely continue to play out as a decade long grind much like the 1930rsquos ldquoSell in Mayrdquo is statistically valid and it favors months

International View Tough economic times and below-normal growth span most of the world Growth estimates generally are below normal Emerging economies will probably have faster growth than major developed nations The greatest fears are for sovereign defaults in Europe or a ldquohard landingrdquo in China The kind of sovereign debt crisis that faces the world is nothing radically new Historically the only path out (lasting several years) is heavy inflation Germany is blocking that path for Europe so collapse remains a possibility

Econometric Models Most number crunchers my aspiration conclude that the economy is still bad enough that it will likely keep getting somewhat better sooner or later rdquoReversion to the meanrdquo is working in our favor ndash times are tough so eventually they are likely to improve The pull back toward the mean however is not as strong as it has been for the past 3 years

Six-Month Stock Market Indicators April 21 2013 Over 50 timing indicators focused on market behavior a few months ahead

Overview

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 2 This is research not investment advice

Still more than fully invested (Margined)

=====

If there was any real agreement on how to accurately value stocks prices wouldnrsquot go up and down as much as they do The never ending stream of world news economic business and company developments with largely unknowable consequences however make business valuation an approximate art rather than a clear science The measures here gauge ndash only roughly -- whether the stock market as a whole is priced reasonably My favorite is the Morningstar Market Valuation Graph below

MorningstarCom Market Valuation Graph (Click to the Max time period view of the chart) Status Valuation at 099 is near fair value About the indicator This graph is a fundamental

financial analysis accounting calculation based on net present value calculations of long-term projected profits for the thousands of stocks Morningstar tracks It is a basic check to see if the stock market pricing makes sense

SampP 500 to Book Value (Barronrsquos) VectorGrader Status The current market price-to-book value of about 23 is below the median level of 277 and well below the typical historical market peak valuation ratio of approximately 3 At the pit of the 2008-2009 crash the ratio sank to 15 About the indicator Book Value is the money you

would get if you closed a business and sold off all of its physical plant and inventory Itrsquos one of the most basic valuation tools for stocks On its own it doesnrsquot mean too much since valuations can be quite debatable However reasonable book value levels confirm that stocks are not wildly overpriced today and that room remains on the upside Total Market Valuation vs GNP (GuruFocuscom Free registration required The linked page is a good primer on valuation) VectorGrader chart See also Discounted Cash Flow Valuator for individual stocks Status My two data sources do not agree GuruFocus scored the ratio at 103 and VectorGrader says 110 Either way the market is modestly overvalued

About the Indicator In a mildly famous 2001 Fortune magazine article Warren Buffet wrote that despite some limitations the ratio of total stock market valuation to Gross National Product ldquois probably the best single measure of where valuations stand at any given momentrdquo At 55 stocks would a fantastic buy At 110 it would be time to think seriously about selling SampP-500 Price Earnings Ratio VectorGrader Barrons Table and SampP 500 Earnings (The link above is to wwwmultplcom courtesy of Josh Staiger) Source data available online courtesy of Robert Shiller and SampP) Status If you judge by current earnings the SP 500 at 17 is fine but not low Going by an average of a rolling10-year average of past earnings the SampP is still pricey I side with the short-term view because the past decade has contained two very nasty recessions skewing the average About the indicator Intuitively the ratio of a stocks price to the companys earnings should be the key objective tool for judging if a stock is properly valued and for comparing multiple stocks High Price-to-Earnings ratios should make investors worry that a stock is over-priced Likewise low PE ratios should help to flag bargains Unfortunately as indicated in this Mark Hulbert article PE ratios have negligible value in predicting either one-year or even 10-year stock price moves As discussed in the Fed Model (below) my own statistical analysis does not find any validity in using PE ratios for 6-month stock market analysis

The Fed Model (Wikipediaorg explanation) Source

data for SampP Earnings and long interest rates made available courtesy of Robert Shiller Status Today you can read this measure as saying either that the market is overpriced or that it is underpriced The interpretation mainly depends on how long an historical average of earnings you want to consider (Given the current long T-Bond rate of 27 and based on experience since 1960 a regression model predicts that the SampP 500 PE should be approximately PE = 1 (0808 T +0010) PE = 1 ( 0808 (003) + 0010) = 39

Select to view

Overview Market Valuation Measures

Economic Indicators

Trader Signals - Fast Trader Signals ndash Slow International View

Econometric Models About This Forecast

Six-Month Stock Market Indicators

Market Valuation Measures

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 2 This is research not investment advice

Still more than fully invested (Margined)

=====

If there was any real agreement on how to accurately value stocks prices wouldnrsquot go up and down as much as they do The never ending stream of world news economic business and company developments with largely unknowable consequences however make business valuation an approximate art rather than a clear science The measures here gauge ndash only roughly -- whether the stock market as a whole is priced reasonably My favorite is the Morningstar Market Valuation Graph below

MorningstarCom Market Valuation Graph (Click to the Max time period view of the chart) Status Valuation at 099 is near fair value About the indicator This graph is a fundamental

financial analysis accounting calculation based on net present value calculations of long-term projected profits for the thousands of stocks Morningstar tracks It is a basic check to see if the stock market pricing makes sense

SampP 500 to Book Value (Barronrsquos) VectorGrader Status The current market price-to-book value of about 23 is below the median level of 277 and well below the typical historical market peak valuation ratio of approximately 3 At the pit of the 2008-2009 crash the ratio sank to 15 About the indicator Book Value is the money you

would get if you closed a business and sold off all of its physical plant and inventory Itrsquos one of the most basic valuation tools for stocks On its own it doesnrsquot mean too much since valuations can be quite debatable However reasonable book value levels confirm that stocks are not wildly overpriced today and that room remains on the upside Total Market Valuation vs GNP (GuruFocuscom Free registration required The linked page is a good primer on valuation) VectorGrader chart See also Discounted Cash Flow Valuator for individual stocks Status My two data sources do not agree GuruFocus scored the ratio at 103 and VectorGrader says 110 Either way the market is modestly overvalued

About the Indicator In a mildly famous 2001 Fortune magazine article Warren Buffet wrote that despite some limitations the ratio of total stock market valuation to Gross National Product ldquois probably the best single measure of where valuations stand at any given momentrdquo At 55 stocks would a fantastic buy At 110 it would be time to think seriously about selling SampP-500 Price Earnings Ratio VectorGrader Barrons Table and SampP 500 Earnings (The link above is to wwwmultplcom courtesy of Josh Staiger) Source data available online courtesy of Robert Shiller and SampP) Status If you judge by current earnings the SP 500 at 17 is fine but not low Going by an average of a rolling10-year average of past earnings the SampP is still pricey I side with the short-term view because the past decade has contained two very nasty recessions skewing the average About the indicator Intuitively the ratio of a stocks price to the companys earnings should be the key objective tool for judging if a stock is properly valued and for comparing multiple stocks High Price-to-Earnings ratios should make investors worry that a stock is over-priced Likewise low PE ratios should help to flag bargains Unfortunately as indicated in this Mark Hulbert article PE ratios have negligible value in predicting either one-year or even 10-year stock price moves As discussed in the Fed Model (below) my own statistical analysis does not find any validity in using PE ratios for 6-month stock market analysis

The Fed Model (Wikipediaorg explanation) Source

data for SampP Earnings and long interest rates made available courtesy of Robert Shiller Status Today you can read this measure as saying either that the market is overpriced or that it is underpriced The interpretation mainly depends on how long an historical average of earnings you want to consider (Given the current long T-Bond rate of 27 and based on experience since 1960 a regression model predicts that the SampP 500 PE should be approximately PE = 1 (0808 T +0010) PE = 1 ( 0808 (003) + 0010) = 39

Select to view

Overview Market Valuation Measures

Economic Indicators

Trader Signals - Fast Trader Signals ndash Slow International View

Econometric Models About This Forecast

Six-Month Stock Market Indicators

Market Valuation Measures

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 3 This is research not investment advice

The current SampP-500 PE based on 10-year trailing earnings is roughly 21 About the indicator This popular classic stock market valuation model starts from the simple premise that the earnings to price ratio (EP) of basket of quality stocks like the SampP 500 index and the yield from long term quality bonds should be just about the same with the stocks having a little higher return to reflect their higher inherent risk This Mark Hulbert (MarketWatchcom) article says there is not much predictive value to the indicator My own analysis finds no statistical link in the 6-month time frame between PE ratios and the SampP-500 average

Value Line 3-5 Year Appreciation Potential Status At the end of December VLMAP is at about 50 right where it was last October This is a sell signal for this long term indicator About the Indicator As it has for many years each week

the Value Line Investment Survey announces an estimate of the three to five year median appreciation potential for

the 1700 stocks they track The lowest recent appreciation estimate was 35 at the previous market high on 7132007 The highest appreciation potential recorded was

185 at the panic market low of 392009 In general a reading of 55 points to a sell and 100 signals buy according to this Mark Hulbert MarketWatchcom article

Tobinrsquos Q (VectorGradercom) Status Neutral to mildly About the Indicator (From VectorGradercom linked page) The Tobins Q is the ratio of price to replacement cost which is in many ways similar to book value It was developed by Economic Nobel laureate James Tobin in the 1960s as a metric for valuing the stock market The Q ratio can be calculated from the most recent

Federal Reserve Flow of Funds release The ratio is

calculated by dividing line 35 of table B102 by line 32 The historical data is also available on the St Louis

FRED website However because the Flow of Funds

report is released long after the quarter end we update the Q ratio for the change in stock prices since the most recent flow of funds report

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 4 This is research not investment advice

Despite all of its semi-random craziness eventually the stock market reflects corporate profits which in turn reflect the economy and especially interest rates Usually the stock market nervously anticipates ( and over-reacts to) economic conditions by several months (An old adage says that since 1948 the stock market has predicted 20 of the last 10 recessions) The indicators here are my favorites for looking ahead for the economy 6 months to a year Economic Cycles Research Institute US Leading Indicator (Scroll down on the linked page) US Leading Economic Indicator (e-forecastingcom See bottom of linked page) Philly Fed 6 Month Leading Indicator (YChartscom) Conference Board Leading Economic Index Organization for Economic Cooperation and Development Status Most composite leading economic indicators are slightly positive but muted signaling slow economic growth ahead Highly regarded ECRI remains convinced that the US is already in recession ndash despite the fact that their own leading indicator has been rising since July About the indicators These are just a few of the groups that compile and aggregate statistics of several economic factors that tend to lead the economy both up and down Stock market performance is typically part of the group of measures that makes up a leading economic indicator so by definition that part of the leading indicator cannot lead the stock market Other parts of a LEI however can lead the stock market Changes and directions of the leading economic indicators are worth paying attention to As pictured below there is a strong long term linkage between composite leading indicators and periods of recession

Anxious Index for Recession Probability (Philadelphia Fed xls file) Status The jury is split ECRI and Gary Shilling are convinced that the US is already in recession But on average the gurus of economics have eased off their fears of a near-term recession As of 2152013 A panel of 54 economists polled by the Philadelphia Federal Reserve sees about a 15 chance of another recession in the coming half year (Next Anxious Index release on May 10 2013) About the indicator This article by David Leonhardt in the NY Times in February 2008 coined the popular name for this index This Survey of Professional Forecasters maintained by the Philadelphia Federal Reserve hasnt missed calling a recession or called a false positive in all the years since 1968 when it was started This Anxious Index is the successor to the earlier Livingston Index a personal project of a Philadelphia journalist

Effective Federal Funds Rate (from St Louis

Federal Reserve) Status In essence the Fed is paying banks to borrow

Eventually rate cuts will stimulate the economy But because of lag times for now it remains a contrary reminder of just how worried they are at the Fed About the indicator The Federal Reserve largely

controls interest rates Interest rates largely determine business profitability And profitability controls the stock market Enough said MarketWatchcom forecast of interest rates

Select to view Overview Market Valuation Measures

Economic Indicators

Trader Signals - Fast Trader Signals ndash Slow International View

Econometric Models About This Forecast

Six-Month Stock Market Indicators

Economic Indicators

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 5 This is research not investment advice

Probability of Recession Predicted by Interest Rate Spread (NY Federal Reserve Go to linked page or

use your browser zoom on the chart below) St Louis Fed Recession Mode (data can be downloaded)l

Status With short term interest rates near zero the NY

Fed model sees a negligible 48 probability of being in recession next year St Louis sees about a 12 chance of recession About the indicators When the Federal Reserve

raises short term interest rates high enough the economy quiets down -- and possibly goes into recession When the Fed lowers interest rates it supplies a major economic stimulus This well documented indicator from the New York Federal Reserve is an econometric model of the probability of economic recession based on the difference between short term interest rates and the rate on the 10-year Treasury Note Raw data The St Louis Federal Reserve has another recession indicator that is based on more factors than just interest rates non-farm payroll employment the index of industrial production real personal income excluding transfer payments and real manufacturing and trade sales

Citigroup Economic Surprise Index (BusinessInsidercom 4132013) Status (Bloomberg has stopped no-cost coverage of this indicator Since I can only get occasional snapshots of the Indicator I donrsquot put much store in it) In December the index turned down setting up negative expectations ahead of the current round of quarterly reports In April it was still heading down About the Indicator The stock market reacts strongly to unexpected news ndash good or bad This indicator is new to me but there might just be a chance that this leads the market The Bloombergcom description of the chart says ldquoThe Citigroup Economic Surprise Indices are objective and quantitative measures of economic news They are defined as weighted historical standard

deviations of data surprises (actual releases vs Bloomberg survey median) A positive reading of the Economic Surprise Index suggests that economic releases have on balance beating consensus The indices are calculated daily in a rolling three-month window The weights of economic indicators are derived from relative high-frequency spot FX impacts of 1 standard deviation data surprises The indices also employ a time decay function to replicate the limited memory of marketsrdquo

Long Treasury Bond vs Discount Rate (InvestmentToolscom) Status As the subprime mortgage financial panic and

subsequent recession hit the Fed dramatically lowered short term lending rates to near-zero creating a major stimulus to try to pump up the economy The difference between the short and long rates is seldom greater than it is now About the indicator Interest rates are a prime

determinant of profitability and of economic activity This is a major long term telltale of where the market will go next Long-term interest rates have been falling almost steadily since 1980 corresponding with overall stock market growth over the same period Federal Reserve actions moving the discount rate however are a primary factor in short-term business profits and therefore stock market prices For now the big question is when will the Federal Reserve raise rates Unfortunately the flip side of this is that low rates like we now have are a direct statement that the Fed remains deeply worried about the economy

TED Spread (StockChartscom) Status The TED spread has been heading down since

the start of 2012 Good Recent ups and downs of the TED spread have all been mild in comparison to the world-wide financial panic that ran from late 2007 to early 2009 The interest rate for banks lending to one another LIBOR has remained essentially flat since 2010 Major banks do not seem to be seriously worried about other banks failing in the near future About the indicator Credit markets only become

interesting when they fall apart Lack of credit then brings the economy to an abrupt stop This indicator tracks the difference between the 3-month Treasury rate and the 3-month LIBOR -- the interest rate at which banks loan to one another (At least that is what it is supposed to be it the banks arenrsquot trying to rig the numbers) Normally these two banking insider rates should be close

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 6 This is research not investment advice

Money Supply (M1 yy Federal Reserve) (MZM yy Federal Reserve) Status We are receiving an open-ended expansion of the money supply via QE4 About the Indicator The economic theory is that increasing the money supply should raise asset prices and lower interest rates Irsquom not an economist so Irsquoll avoid this debate

Building Permits and Housing Starts (St Louis Federal Reserve) Status Construction is definitely up from the pits but home building is still at depression levels Over the next few years this could be the most significant sector of improvement in the economy About the indicator Housing and construction are important economic indicators usually leading the stock market by about a year Housing construction itself is just about 2 of the economy but when all related factors such as new appliance purchases ndash housing constitutes a larger slice These linked charts from the St Louis Federal Reserve show clearly that if you have several years of over-building then payback in the form of a dead market for new construction must eventually follow

Another housing bubble is not likely to start soon according to this article by Robert Shiller (NY Times free subscription required) ldquoHousing Bubbles Are Few and Far Betweenrdquo

Dollar Index (MarketWatchcom) Dollar Index (StockChartscom) Status The race to the bottom in currency valuations continues The Buck has been roughly constant for the past two years compared to other currencies It is in an uptick Nothing serious yet About the indicator The primary difficulty in reducing the value of the Dollar is that other countries will also inflate their currencies in order to maintain their relative trading advantage

Household Net Worth (Federal Reserve see Line 42) Status Nearly back to pre-recession levels Improving overall but still down $15 trillion from 2007 Thanks mainly to the rebounding stock market total net worth has come back from being down $18 trillion an

incredible amount The problem however is that home prices where the net worth of the middle class is centered have not risen much The middle class setback is also a setback for the economy and the stock market About the indicator Net worth is the score that counts

Personal wealth fell by an incredible 18 trillion dollars during the Great Recession equivalent to a full year of GDP and it could have been much worse All that would have been needed for a complete collapse would have

been for cascading bank business and personal wealth failures to get rolling in a domino sequence as they did in the Great Depression The couple of trillion dollars that the Government threw down as part of the TARP and stimulus efforts looks like a smart investment if it saved us from what could have been another ten or twenty trillion dollars of damage

US Federal Deficit (St Louis Federal Reserve) Status Has the knife stopped falling This 512011 article by Lori Montgomery (Washington Post free subscription required) remains the best summary of the deficit problem that I have read About the indicator A lot of investors make a lot of noise about the deficit but the deficit does not correlate very well with changes in the stock market Still fear of the rising deficit has stopped any chance of further stimulus from Congress So a very slow and faltering recovery is almost certain

US Balance of Payments (Federal Reserve link) Status The balance of payments has stabilized ndash but at

a high negative level About the indicator The worsening Balance of

Payments probably means little in the short term but is a major negative long term problem for the US The persistent balance of payments deficit is the central issue in the current round of competitive currency devaluations underway around the world (WashingtonPostcom free subscription required)

Shipping amp Transportation Sector Strength Baltic Dry Index BDI (StockChartscom) HARPEX (Harper Peterson Container shipping index) Transportation Stocks USDOT Transportation Services Index Status Taking a long term view the USDOT

Transportation Services Index (a fairly good leading economic indicator) is flat pointing to very weak growth Shipping rates may have bottomed but their continuing weakness signals a slow recover Container shipping rates covered by the HARPEX ndash more closely related to expectations of retailers ndash remain below historically-average levels The Dow Jones Transportation Index (StockChartscom) had been roughly flat for the whole year but has surged since November About the indicator Shipping rates and pricing of

transportation industry stocks are much followed and basically believable long-lead economic indicators The reasoning is simple if a lot of goods are being shipped then the economy must be improving The Dow Theory (Wikipedia) for example one of the oldest and most followed technical indicators is based on the relative strength of the Dow Jones Industrial Average versus the Dow Jones Transportation Index How much it actually counts is debatable (Mark Hulbert column) The Baltic Dry Index (Wikipedia) The Best Economic Indicator Youve Never Heard of tracks the cost of

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 7 This is research not investment advice

moving materials by sea A higher value indicates rising shipping levels and therefore points to economic expansion This Wall Street Journal article and this Bloomberg article (1102011) say that the Baltic Dry Index and most other shipping indexes may give a fuzzy indication of world economic activity this year because of an unusually large number of new ships this year

Inflation Rate (Consumer Price Index Rate of change Federal Reserve has set an inflation goal of roughly 2 and at the current 23 inflation we are still near the goal Excellent It is pretty hard to get scared about the inflation boogeyman after you see this graph This is about as low as inflation has been in our lifetimes In the US and other developed economies inflation is very low ndash deflation still remains the greater worry If US inflation resumes donrsquot worry until it reaches 4 annually (see below) The inflation situation is quite different in developing economies (MSN Jim Jubak 1212011) where inflation is already at worrisome levels How is it that developing nations can have high inflation while the Dollar is crashing The falling Dollar should be causing US inflation to skyrocket The answer is that developing nations are trying to maintain their favorable trade balances by inflating their currencies faster than we sink ours About the indicator High interest rates whether caused by inflation or central bank policy tend to precipitate stock market declines and recessions As discussed in this Mark Hulbert MarketWatchcom article (1182011) rates of inflation greater than 4 tend to coincide with poor market performance (Chart below is from Mark Hulbert article)

When trailing 12-month inflation is

SampP 500rsquos average monthly return since 1871 is

of months falling into this category

Below 0 061 28 Between 0 and 1 050 5 Between 1 and 2 040 13 Between 2 and 3 096 15 Between 3 and 4 053 10 Between 4 and 5 -023 6

Above 5 -005 22

Current National Financial Activity Index

(CFNAI) (Source Chicago Federal Reserve) Status This index is weak It has hovered around zero

for nearly 2 years now more evidence of the ldquoSecond Great Contractionrdquo This expects economic growth to stagnate for the next couple of months ndashwhich at least is a lot better than being lsquotruly rottenrsquo About the Indicator The Current National Financial Activity Index is a weighted measure of total national business activity compiled monthly and based on 85 economic indicators Though developed primarily as a tool for forecasting inflation some believe that it is a better indicator than GDP of short term actual economic performance

GDP Potential GDP vs Real GDP

(Data link at Federal Reserve )

(Use your viewerrsquos magnificationzoom setting to be able to read the graph No you really should do it ndash the gap shown in the graph is amazing) Status Four years later inflation-adjusted GDP is just getting back to where it was in 2007- 2008 It is still far below potential ndash providing room for significant growth Potential GDP has recently been recalculated and scaled down a bit but the gap between actual and potential remains at about 6 -- much higher than any other historical point About the indicator The nonpartisan Congressional

Budget Office maintains a database and econometric model of Potential GDP which is the GDP that could result if the workforce was fully employed The graph above shows both Real GDP and Potential GDP all in constant chained 2005 dollars If you really zoom-in on the graph you will see that since the late 1940rsquos periods where the economy is booming and Real GDP is higher than Potential GDP tend to end badly ndash the Federal Reserve takes away the punch bowl and the party ends with a crashing stock market followed by a recession Currently the opposite situation exists and the Fed will continue to do all that is possible to get the economy performing better

Professional Economists Survey of Forecasts for Inflation GDP Unemployment and Long Term SampP 500 Gains and Cong Budget Office Economic Outlook Status The 1st quarter 2013 forecasts by a survey of professional economists are slightly stronger than last quarter weak GDP gains (19 annual rate for 2013) modest inflation (21 headline for 2013) continuing high unemployment (84 an improvement and only going down to 74 by 2014) and normal 10-year average expected gains for the SampP 500 (61) but for the second time down from the previous survey All of which point to continuing modest economic growth The high lingering unemployment is tough for people but has

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 8 This is research not investment advice

little relation to near term stock market moves The CBO forecast has similar conclusions About the indicator Next release May 10 2013 The Survey of Professional Forecasters ldquois the oldest quarterly survey of macroeconomic forecasts in the United States The survey began in 1968 and was conducted by the American Statistical Association and the National Bureau of Economic Research The Federal Reserve Bank of Philadelphia took over the survey in 1990 The Survey of Professional Forecasters web page offers the actual releases documentation mean and median forecasts of all the respondents as well as the individual responses from each economist The individual responses are kept confidential by using identification numbersrdquo

Commodity Research Bureau Index

(InvestmentToolscom) (CRB site chart) Status The CRB Index has been weak and essentially

flat for over a year indicating relatively limp demand in the economy Not so good The mildly good news is that it isnrsquot falling badly About the Indicator If the stuff we use to make things

costs more thatrsquos probably a good sign that at least people are trying to make things When it is flat ndash like now ndash it is a sign of stagnation The Commodities Research Bureau (CRB) Index (Wikipedia description) represents a market basket of futures prices for major world commodities According to CRB ldquoThe

commodities used are in most cases either raw

materials or products close to the initial production stage which as a result of daily trading in fairly large

volume of standardization qualities are particularly

sensitive to factors affecting current and future economic forces and conditions Highly fabricated

commodities are not included for two reasons (1) they

embody relatively large fixed costs which fact causes them to react less quickly to changes in market

conditions and (2) they are less important as price

determinants than the more basic commodities which are used throughout the producing economyrdquo The CRB

Index measure is further influenced by the fact that it

is measured in US Dollars ndash so a fall in the Dollar will

automatically make it appear that world commodity prices have shot up

Corporate Profits (St Louis Federal Reserve)

Domestic Income) SampP 500 Earnings (data courtesy Robert Shiller site hosted by Josh Staigner) Philadelphia Federal Reserve Survey of Professional Forecasters Status Corporate profits are well above pre-recession levels though still down a bit from late 2011 Liquid assets available for new investment are extremely high Now that profits have returned the forecasted annual rates of profit growth are down to normal levels About the Indicator Rising corporate profits is what stock market investing is all about The US Department

of Commerce Bureau of Economic Analysis posts quarterly results of US economic performance Here is a primer on the BEA National Income and Product Account data

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 9 This is research not investment advice

C

None of these short-term tell tales are part of my 6-month forecasting model At best they may help to fine tune a buying or selling opportunity (ie Buy the dip) Any of my trend guesses here will probably be out of date by the time you read this For the part-time investor trend following is dangerous ndash you enter the trend too late and miss most of the gains Then the inevitable crash happens before you can react in time Using short term trading indicators is a lot like playing a carnival game ndash it looks so simple but somehow you always lose But if you want to look at what is likely for the next couple of months I like the first two of these indicators best

NYSE New Highs minus New Lows (StockChartscom) Status The Daily chart is a little worrisome About the indicator I like this short term indicator of

the broad stock market as it is really easy to read changes infrequently and tends to lead the market averages A bullish signal occurs when the ratio is in an uptrend Longer term investors will mainly pay attention to the Weekly view lower on the page Consumer versus Cyclical Stocks (StockChartscom) Status The several month trend had been upward but the indicator has fallen sharply About this indicator In this MSN MoneyCentral article (11182011) Anthony Mirhaydari makes a case that cyclical stocks beating consumer staples is a sign of a bull market ndash and vice versa

Emerging Markets versus Consumer Staples Status This chart has been negative for years a sign of risk averseness Often foreign stocks lead the US marketrsquo About this indicator Are investors turning to riskier

emerging market stocks or just hunkering down with old reliable blue chips

Stocks versus Bonds

Status The Daily chart is negative but the Weekly chart remains positive A split decision About this Indicator In theory over the long haul holding bonds should give about the same yield as holding stocks This chart shows how a bond fund is faring against a stock fund

Stocks Trading Above 50-Day Average

(StockChartscom) Broader Market (Barchartcom covers approximately 5000 stocks) Status At 54 and falling Wait for the turn-around About the indicator This is a very short term indicator for whether the market is overbought or oversold The worry point is above 80 The turn-around point is at around 20 to 30

MACD SampP 500 Moving Index Average Convergence Divergence Status The ldquofastrdquo moving average is above the slow average ndash good About this Indicator Fidelity Investments has a good article on back- testing various MACD strategies here After all is said and done Irsquom afraid that all of it sounds like both mumbo and jumbo Moving averages are plots of the arithmetic or exponential mean of prices for some period of time in the past The one shown in the link is the SampP 500 the most commonly followed average for MACD charts The Moving Average Convergence Divergence is a plot of two moving averages a lsquoslowrsquo moving average that includes more days than the second lsquofastrsquo average A positive divergence occurs when the lsquofastrsquo average has risen above the level of the lsquoslowrsquo average I am not really a big fan of these moving averages If you use very long time periods for your MACD then it generates buy and sell signals too late to be of real value Using shorter periods for your MACD graph generates many more false buy and sell signals

Select to view

Overview Market Valuation Measures

Economic Indicators

Trader Signals - Fast

Trader Signals - Slow International View

Econometric Models About This Forecast

Six-Month Stock Market Indicators

Trader Signals ndash Fast (well relatively fast)

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 10 This is research not investment advice

NYSE Daily - Weekly Advance Decline Line

(StockChartscom) Status Turning up at the moment About the indicator Often market breadth (A simple ratio of how many stocks go up vs down) leads actual swings of index prices These charts are only for traders or for picking an auspicious moment to buy or sell The initial view of this short term indicator is daily Advances-Declines -- Do a good few days follow a bad few days or what Reset the chart to see a weekly view again using the ldquolinerdquo view Type rather than the candlestick view Every few weeks the market tends to get overextended creating a relatively good time to trade Buy when the weekly line has plummeted and starts to rise sell when it hits a dangerous peak and turns down VIX - Implied Market Volatility (StockChartscom) Status The fear gauge is incredibly low The market is way overdue for some bad news About the indicator The CBOE (Chicago Board Options Exchange) Volatility Index

reg (VIX

reg) measures market expectations of near-

term volatility conveyed by stock index option prices According to the CBOE since its introduction in 1993 VIX has been considered by many to be the worlds premier barometer of investor sentiment and market volatility When the VIX shoots up you are in the midst of a crisis - if you didnt know that already from the rapidly crashing stock market In this August 2011 MarketWatchcom article Mark Hulbert describes a very simple VIX strategy avoid the stock market for the coming month if the VIX reading is above say 20 which he notes is approximately the median VIX level for the last two decades Hopefully the VIX signal will come early enough to help avoid developing market crashes The negative side is that it will also lead to missing sharp market rebounds For example following it would have led to missing nearly the entire market rebound from the crash of the winter of 2008-2009 Historically this VIX strategy performs slightly better than a buy-and-hold strategy

Viewing Multiple Stock Markets (Click to the

maximum time frame view) Status Is the current downturn just a blip Emerging

markets have been the weakest About the indicator The Dow-30 and the SampP-500 are

what most people usually thing of as The Stock Market Take a look at some of these other long term graphs I prefer

Value Line Arithmetic Index (VAY) (My preferred stock market index Status Going strong About the indicator Taking a many-year view this

remarkably consistent index appears to have nearly caught up with its long term trend -- making the slingshot rebound from the crash of 2008-2009 weaker The Value

Line Arithmetic Average includes the top 1700 companies in the US -- all weighted equally (Similar equal weight ETFs are EWRI and RSP) Historically the arithmetic index it has had an amazingly consistent growth pattern much steadier than the Dow 30 SampP 500 or NASDAQ Composite indices Because of the equal weighting portfolio rebalancing is built-in As a result besides being more predictable the equal weight index will regularly outperform a conventional index of the same stocks Until recently it was not possible to buy an equal weight EFT but now a number of equal-weight index fund ETFs such as EWRI and RSP have been introduced They have only been around a few months but so far they appear to have very similar tracks to the Value Line Arithmetic Index Good news

EEM The MSCI Emerging Markets Fund represents valuations of the developing markets that have the greatest potential for growth Emerging markets have been at a plateau since early 2010 Profits need to grow but this average still is well below trend A new equal weight emerging market ETF is EWEM

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 11 This is research not investment advice

Several of these slow moving trading indicators may seem far-fetched irrational or bizarre None the less a few are probably the most helpful market timing tools for a part-time investor The old adage of ldquoSell in Mayrdquo leads the pack with a documented track record going back several hundred years

The Second Great Contraction (link to This Time is

Different Eight Centuries of Financial Folly at Amazoncom) Status The world still teeters at the edge of an economic abyss that threatens to come from credit disruption The US and the rest of the world are only mid-way through the world-wide economic debt collapse that began in 2007 Typically economic pains from credit destruction last much longer than ordinary recessions (Ezra Klein Washington Post 1092011) Slow growth is the best that can be expected for years to come (IMF) Risk remains that cascading debt defaults especially from sovereign debt collapse in Europe can cascade into a world-wide economic collapse Unfortunately mistakes by any number of fairly independent players still can bring on the nightmare at most any time About the indicator Reinhart and Rogoff powerfully demonstrate in This Time is Different the current economic trauma is more like the Great Depression than any of the comparatively short-lived recessions that occurred since then The resolution of our Second Great Contraction as Rogoff calls it will most probably take several more years Because of government-created incredibly low interest rates the worst may already be over for stocks Since borrowing costs will remain abnormally low for years corporate profits may remain strong despite continuing economic pain This is not a market for the faint of heart but it may also be seen as the early stages of a tremendous long term growth market

ldquoSell in Mayhelliprdquo Indicator

Status For the past two years people seem to have jumped the gun and started to sell in April rather than May The same thing seems to be happening now About the indicator Here is an update from Mark

Hulbert on the Halloween Indicator ndash still going strong If you had to pick just a single stock market timing signal this old and crazy-seeming one might well be the best Statistically performance of stock markets worldwide during the summer months is not as good as during the winter When the market crashes it usually is during September and October The summer - winter trading pattern has been shown to occur in many markets world wide for the past several hundred years This Mark Hulbert article from MarketWatchcom cites a definitive study showing that the pattern has been valid for at least 317 years in the UK This MarketWatch column by Sy Harding summarizes his variant on the approach which includes also being invested on holidays My own analyses show that the rdquoSell in Mayrdquo or ldquoHalloweenrdquo effect is greatest when the economy is heading into a recession On the other hand when coming out of a recession the effects of a rising economy overpower the semiannual pattern According to a Charles Schwab report (5142012) there appears to be a distinct split among sectors in seasonality as shown in the table below

Investor Sentiment (AAII Investor Sentiment Guide) (Barronscom Investor Sentiment page)

Select to view Overview Market Valuation Measures Economic Indicators

Trader Signals - Fast Trader Signals ndash Slow

International View Econometric Models About This Forecast

Six-Month Stock Market Indicators

Trader Signals ndash Slow Moving

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 12 This is research not investment advice

Status Some people pay serious attention to these indicators I donrsquot About the Indicator Investor sentiment tends to be a contrarian indicator When there are vastly more Bulls than Bears it is time to worry When you have a bad sinking feeling in your gut you probably should be a buyer of stocks Retail investors follow trends but they donrsquot lead them As a result they are usually late to the party When too many people get to any party the police usually come to bust it up Peaks in investor sentiment usually lead the market by a few months As Brett Arends a writer for the Wall Street Journal notes in this MSN article on Why Market Timing Works ldquoour feelings are terrible guidesrdquo The American Association of Individual Investors publishes a weekly survey of member sentiment (bullish

bearish neutral According to AAII ldquothe current

historical averages are bullish 39 (standard deviation of 107 percentage points) neutral 31 (standard

deviation of 9 percentage points) and bearish 30 (standard deviation of 10 percentage points)rdquo This article at the AAII website covers a statistical analysis

that verifies the sentiment survey as a solid contrarian indicator danger lies ahead if investors get too bullish

First Year of the Preidential Election Cycle (Mark Hulbert MarketWatchcom) Status It depends which stock market average is reviewed and for what historical period but overall the first year of the presidential cycle tends to be weak The fact that we are in a major long term financial crisis however probably trumps this cyclic indicator as the Federal Reserve still is pushing the economy up with historically low interest rates About the Indicator According to Mark Hulberts

statistical calculations of the Dow Jones Industrials since 1896 there is statistical validity at the 95 confidence level that year 3 of the presidential election cycle yields outsize gains Year 4 should also produce some gains Year 2 typically yields nearly zero

Stock Market Slow Moving Average (StockChartscom 12 month SP-500 moving average) Status In mid-November the index dropped down to touch the moving average then bounced up That is generally considered to be a sign of strength About the indicator In my analysis the moving

average indicator had a poor track record for my favorite market average the Value Line Arithmetic Average Index in the years between 1985 and 2010 ndash it was usually better to bet against the long term moving average indicator Since 1985 at my 6-month decision points (October and May) where the Index price was BELOW the 200-day moving average the average gains were 9 in the next six months versus only 6 gains when Index value was ABOVE the moving average At

those times when the Index was below its 200-day moving average it was right 2 out of 7 times ndash not very good My conclusion Most of the time (80) this indicator gives a positive reading which has little predictive value but in the few instances when the Index is significantly below the moving average a market panic is probably in full swing and you should be starting to think about buying again Mark Hulbert seems to agree that this indicator now fails to work

Stocks Trading Above 200-Day Moving Average (stockchartscom covers SampP-500 stock) Status The SampP 500 is 84 high enough to worry

about About the indicator As a general rule when a stocks

price is above its 200-day moving average the stock has been in a long-term price rise So an increasing percentage of stocks priced above their 200-day moving average is generally a good sign However when 80 to 90 of stocks are trading above their averages it is usually a signal that euphoria has gotten out of hand and a market correction is due Similarly when only 20 to 30 of stocks are trading above average a sharp bullish upswing becomes very likely NYSE Advance-Decline Line (cumulative) (InvestmentToolscom)) Status Still points up Good About the indicator The indicator is a cumulative count

of advances on the NYSE minus declines since 1996 Click to the 5-year view This good MID-TERM indicator tends to form a rounded top before falling as part of a broad Bear Market TomTrsquos Post - 2000 Anomaly Status Since December smaller stocks have been stronger than the large caps Since the crash of 2000 the bigger and better known US stocks in the Dow 30 and the SampP 500 have fared worse than the run of the mill stocks that dominate the NASDAQ composite or especially the Value Line Arithmetic Index That is different than previous decades when the averages followed more similar tracks About the indicator As shown in this Yahoocom chart reproduced below something strange has happened in the US stock market since the crash of 2000 From 1984 through the SampP 500 (red) the NASDAQ (green) and the Value Line Arithmetic Index followed very similar paths In the DotCom bubble NASDAQ shot up and the SampP500 rose appreciably but the Value Line was remarkably untouched Since the crash the popular stocks of the SampP500 and the NASDAQ have floundered while the Value Line has gone on almost undeterred Does this signify a massive shift in markets Or is this actually a massive negative stock market bubble that will soon send the popular market averages soaring as retail investors flock back to stocks

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 13 This is research not investment advice

Rolling 10-year SampP 500 Total Return (Article by

Anthony Mirhaydari MSN Money Central) Status This chart practically guarantees a multi-year

significant increase in stock investor enthusiasm Read below for the reason

About the Indicator Most financial advisors tell their

clients to ldquotake a long term viewrdquo of owning stocks Thatrsquos what the chart above shows ndash 10-year rolling returns of the SampP 500 Right now the picture implies that we have gone through a terrible decade of stock performance so now things most likely will get better Thatrsquos clearly what typically happens But this simple-seeming chart is largely an illusion Ten years to most people is what ldquolong-termrdquo investing means (The lazy Law of Round Numbers leads people to choose 10 years as opposed to something irregular like 17 years) Because we already know what happened 10 years ago (an historic boom followed by a terrible crash) we already know that in a couple of years this chart will show a much rosier picture (Comparing the current market to the peak of the Dot Com bubble looks a lot worse that comparing it to the low point of the ensuing crash) As a result there is an incredibly high probability that for several years to come thousands of financial advisors will be showing their clients that the stock market actually gives excellent long-term rewards A gradual but long-running increase of investor enthusiasm is almost certain For the simple reason that long-term means 10 years to most people

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 14 This is research not investment advice

The world keeps getting smaller For the next several decades most of the best market investment opportunities probably lie outside the US The reason is simple it is easier to increase wealth in percentage terms if you are poor rather than wealthy And

percentage growth is what investing for profit is all about US growth will probably average 2 to 4 for the next decade while China will probably have growth in the 8 to 10 range ndash 3 to 4 times higher Case in point US housing construction is struggling to get back to the 1 million units per year level China on the other hand has just announced plans for a crash program to build an additional 10 million housing units for each of the

next several years Commodity prices may well skyrocket Multinationals based in the US may well perform much better than the overall US economy The long overdue growth of emerging nations creates a double sided situation On side provides immense growth opportunities for business and the low cost of overseas labor means US inflation probably will be contained for many years The other side of the situation constrains US worker incomes ndash it is hard for many working people to seek higher incomes when they are directly competing against overseas workers making 110

th as much money It is easy to sit back and be

philosophical about all of this ndash until your particular field is hit with devastating competition that destroys your business and your life Believe me I know Organization for Economic Cooperation and Development Status OECD predicts spotty world-wide economic

growth with mild recessions for most of Europe The index for the US is flat About the indicator There are many reasons to take international comparisons with a heaping tablespoon of salt ndash I can speak from personal experience having prepared some international statistical publications A number of countries consider economic data to be state secrets and the data they provide to international organizations may have little to do with reality None the less it is worthwhile checking these estimates now and then The rates of change are what count

IMF World Economic Outlook Status IMF sees a slowing of growth for the next couple

of years just 11 for the US next to nothing for Europe and an uninspiring 47 for the globe as a whole This is a disappointment About the indicator All you have ever read about

World growth trends becomes clear in this customizable chart from the International Monetary Fund Going back to 1980 you can see the development of major regions of the world and projections for the future -- all in constant currency units (The zoom feature is super Also at the very bottom of the chart the button Play Time runs an animated history of world growth patterns) The take home from this chart is that for the past several decades the rest of the world has been playing catch up with the developed economies As a result other economies have consistently been growing at faster rates than ours For an investor growth RATE is what counts

Sovereign Public Debt Ratio (Wikipedia) Status US debt equals 107 of GDP and is climbing fast This if well above the world average About the indicator This chart ranks nations by their Debt-to-GDP ratios The worst off states serve as bell weathers for the others CIA raw data

US Versus International Focus (Click to the 5 year

view) Status For the past year emerging markets have

significantly lagged the US Emerging market long term GDP growth rates are again far ahead of the US and other developed countries About the indicator The link is to a plot of US stocks

(the SP-500 index) versus a few emerging market favorite ETFs

Select to view Overview Market Valuation Measures

Economic Indicators

Trader Signals - Fast Trader Signals ndash Slow International View

Econometric Models About This Forecast

Six-Month Stock Market Indicators

International View

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 15 This is research not investment advice

Tom Trsquos Stock Market Forecast

Anyone forecasting stock prices deserves your skepticism That includes my forecasts Monkeys (trained or not) often beat both forecasters and investment managers Unfortunately for this October update most of the published forecasts I could find were New Yearrsquos predictions and so are out of date (I find it bizarre that people tend to make forecasts at the turn of the year rather than any other time It must be just another herd-based ldquoround numberrdquo phenomena)

Countless stock market forecasts are posted by groups and individuals but there is seldom much performance evidence given to prove their credibility Some forecasts may be wacky like those based on astrology Other forecasts actually may be brilliant but no track record is provided A few forecasts however do have enough of an experience basis so that they can be tested and have some credibility

I have my own econometric forecasting models and have been evaluating them since 2007 ndash so far with good results (See next page) I WILL UPDATE THIS AS THE END OF MAY I have also included links to a few other models that appear to me to have some merit Models can be very helpful but do not stake your fortune on any of these models ndash including mine

My statistical models forecast a 7 gain in the Value Line Arithmetic Index between May and the end of October 2013 There is a 76 probability of the market at least breaking even and a 53 chance of a temporary drop of 8 or more at some point Compared to my other forecasts for the past few years this is a weak expectation I hope to be able to buy any significant correction by mid-summer My econometric models of the stock market are based on forecasting the Value Line Arithmetic Average which tracks the 1700 largest US companies and accounts for 95 of US industry Here are longer term performance numbers In real world testing my models appear to point to the basic direction of US stock markets most of the time -- which is their purpose

Value Line Dow Jones Annual Forecast

Status At todayrsquos (1152012) 13051 level the DJ-30 is 5 above Value Linersquos average price target of 12900 for 2012 They were right on for 2011 predicting a flat year overall For 2012 VL forecasts a probable range for the DJ-30 from 10330 to 16140 About the Indicator At the close of every year since

1980 the Value Line Investment Survey has published a forecast for the Dow Jones Industrial Average for the coming year The model originally created by Samuel Eisenstadt is a straight-forward statistical model with just 4 variables for the combined 30 Dow stocks current DJ-30 price earnings per share dividends per share and Treasury bond yields In each case the values used are Value Linersquos staff forecasts of changes for the coming year The forecasting results of this model have been impressive as discussed in this 2006 research paper VL notes that considerable deviation from their forecast over the course of a year is to be expected

Philadelphia Federal Reserve Survey of Professional Economists 10-Year SampP 500 Forecast Status For 2013 Q1 the median estimate in the survey of economists is for a 61 annual appreciation rate for the SampP 500 for the coming decade That is down from 68 last year About the indicator I am not sure that this long range forecast has any real value This question was added in 1992 to the Survey of Professional Forecasters provided by the Federal Reserve Bank of Philadelphia The measure here STOCK10 includes percentage point forecasts for the annual average rate of return to equities (SampP 500) over the next 10 years While this indicator is a survey rather than an econometric model it is reasonable to expect that numerous survey responses by professional economists are based on independent econometric models

VectorGradercom Primary Market Model

Status This is a new indicator to me and I think I like

it Currently it points to being 80 invested

Select to view

Overview Market Valuation Measures

Economic Indicators

Trader Signals - Fast Trader Signals ndash Slow International View

Econometric Models

Six-Month Stock Market Indicators

Econometric Models

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 16 This is research not investment advice

(declining) with the overall rating being positive but

near to neutral Momentum seems to be the greatest

positive factor and valuation is a strong negative

About the Indicator VectorGradercom has a rather

complete description of their model at this page

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 17 This is research not investment advice

ecot

Probability of Breaking Even This model estimates the likelihood that the stock market will at least break even in the coming half year A low probability (say below 060) of break-even means there is a very good chance the market will lose money while a high probability (between 80 and 10) implies that it is highly likely the market will rise in price over the next half year

-40

-30

-20

-10

0

10

20

30

40

50

0 02 04 06 08 1

Perc

en

t M

ark

et

Ga

in

foll

ow

ing

fo

rec

as

t

Forecast Probability that market will at least break even

Probability of at Least Breaking Even

Back Test (1984 - 2006)

Real Time Results (2007 -2011)

Current Forecast (Summer 2011)

Predicted vs Actual Gain

This chart presents the half-year gains predicted by the model compared with the gains that actually followed

-40

-30

-20

-10

0

10

20

30

-40 -20 0 20 40 60

Ac

tua

l M

ark

et

Ga

in (

)

Predicted Gain ()

Predicted Gain

Back Test (1984 - 2006)

Real Time (2007 -2011)

Current Forecast (Summer 2011)

Select to view Overview Market Valuation Measures Economic Indicators

Trader Signals - Fast Trader Signals ndash Slow International View

Econometric Models

My Econometric Models Past Performance

Six-Month Stock Market Indicators

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 18 This is research not investment advice

Tom Trsquos Stock Market Forecast

Since 2007 I have been testing ndash in real time -- basic econometric models of the stock market that I have developed The models give a simplified view of how stocks behave based on a few key economic statistics This document is my way of tracking the performance of my models ndash hopefully while keeping my eyes open to other factors related to the market So far results have been encouraging but it would be dangerous to put too much trust in any single stock market tool This document is not intended as investment advice I have no idea whatsoever of what is best for your particular circumstances I want to thank the authors of all of the resources that I have linked to Irsquod appreciate any comments you may have Please send them to tomtiedemangmailcom

Select to view

Overview Market Valuation Measures

Economic Indicators

Trader Signals - Fast Trader Signals ndash Slow International View

Econometric Models About This Forecast

Six-Month Stock Market Indicators

About This Forecast

Copyright copy 2013 Tom Tiedeman Washington DC All rights reserved 18 This is research not investment advice

Tom Trsquos Stock Market Forecast

Since 2007 I have been testing ndash in real time -- basic econometric models of the stock market that I have developed The models give a simplified view of how stocks behave based on a few key economic statistics This document is my way of tracking the performance of my models ndash hopefully while keeping my eyes open to other factors related to the market So far results have been encouraging but it would be dangerous to put too much trust in any single stock market tool This document is not intended as investment advice I have no idea whatsoever of what is best for your particular circumstances I want to thank the authors of all of the resources that I have linked to Irsquod appreciate any comments you may have Please send them to tomtiedemangmailcom

Select to view

Overview Market Valuation Measures

Economic Indicators

Trader Signals - Fast Trader Signals ndash Slow International View

Econometric Models About This Forecast

Six-Month Stock Market Indicators

About This Forecast