Important Questions for Both Bulls and Bears

Preface: Explaining our market timing models 

We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade.

The Trend Asset Allocation Model is an asset allocation model that applies trend-following principles based on the inputs of global stock and commodity prices. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.

 

My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). As this site is shutting down on March 31, 2026, my inner trader is retiring so that there will be no tradings outstanding at the end of the quarter. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 to 16-Jan-2026 is shown below, and the chart will no longer be updated.

 

 

The latest signals of each model are as follows:

• Ultimate market timing model: Buy equities (Last changed from “sell” on 28-Jul-2023)*
• Trend Model signal: Bullish (Last changed from “bearish” on 27-Jun-2025)*

* The performance chart and model readings have been delayed by a week out of respect to our paying subscribers.

 

The Fog of War
As the stock market struggles with the daily fog of war headlines, it has arrived at a key crossroad. The accompanying chart shows the evolution of different major U.S. equity averages. We have some questions for both bulls and bears.

The obvious questions are whether the indices can hold support (solid lines) or rally above the falling trend lines (dotted lines). The first shot across the bow of the bulls are the S&P 500 and NASDAQ 100 violations of short-term support, depicted by arrows, but the break has not been fully confirmed by the other averages and last Monday’s panic outside day reversals are mostly holding (red rectangles). More importantly, how market internals evolve in the coming days and weeks will determine whether the bulls or bears have control of the tape.