Hi Toof, Re: Cross-overs and AIM..............
I believe it was Don Carlson who worked on this and came up with the tactic.
Best wishes,
OAG Tom

Q) Have we ever seen v-wave go all the way down to proactive region?

A)
Re: v-Wave in Proactive Range..................

Yes, many times over the years since 1982. It takes a concerted effort on the part of the BEARS to take the market down far enough to be in the Proactive range, however. Here's the list of major Proactive events in chronological order:

 v-Wave "Proactive" History  
 Jan, 1982 thru Feb, 1983 
 Feb, 1984 thru Feb, 1985 
 Nov, 1987 thru Feb, 1988 (Black Monday and the "Crash of '87) 
 Aug, 1990 thru Feb, 1991 (1st Gulf War) 
 Sep, 2001 thru Apr, 2003 (9/11/2001 Attack with Intermittent but sustained near Proactive) 
 Oct, 2008 thru Jun, 2009 ("Financial Crisis") 
 Sep, 2011 thru Oct, 2011 (Brief but good call) 
 Mar, 2020 thru Apr, 2020 (Covid 19 "Crisis") 
 

MRI "Proactive History 
 Aug, 1982 thru Sep, 1982  
 Nov, 1987 thru Apr, 1988 (Black Monday and "Crash of '87) 
 Dec, 1988 thru Jan, 1989 (intermittent signals) 
 Sep, 1990 thru Feb, 1991 (1st Gulf War) 
 Oct, 1998 thru Nov, 1998 
 Oct, 2001 thru Nov, 1991 (9/11/2001 Attack plus Market Stresses) 
 Jul, 2002 thru Jun, 2003 
 Oct, 2008 thru May, 2009 (Financial Crisis) 
 Dec, 2009 thru Mar, 2010 
 Jul, 2010 thru Nov, 2010 
 Aug, 2011 thru Mar, 2012 
 Jun, 2012 thru Oct, 2012 
 Aug, 2015 thru Apr, 2016 (Intermittent but sustained at or near Proactive) 
 Dec, 2018 thru Mar, 2019 
 Mar, 2020 thru Jun, 2020 (Covid 19 "Crisis") 
 

Good morning J20, Re: v-Wave in Proactive Range..................

Yes, many times over the years since 1982. It takes a concerted effort on the part of the BEARS to take the market down far enough to be in the Proactive range, however. Here's the list of major Proactive events in chronological order:

 v-Wave "Proactive" History  
 Jan, 1982 thru Feb, 1983 
 Feb, 1984 thru Feb, 1985 
 Nov, 1987 thru Feb, 1988 (Black Monday and the "Crash of '87) 
 Aug, 1990 thru Feb, 1991 (1st Gulf War) 
 Sep, 2001 thru Apr, 2003 (9/11/2001 Attack with Intermittent but sustained near Proactive) 
 Oct, 2008 thru Jun, 2009 ("Financial Crisis") 
 Sep, 2011 thru Oct, 2011 (Brief but good call) 
 Mar, 2020 thru Apr, 2020 (Covid 19 "Crisis") 
 

MRI "Proactive History 
 Aug, 1982 thru Sep, 1982  
 Nov, 1987 thru Apr, 1988 (Black Monday and "Crash of '87) 
 Dec, 1988 thru Jan, 1989 (intermittent signals) 
 Sep, 1990 thru Feb, 1991 (1st Gulf War) 
 Oct, 1998 thru Nov, 1998 
 Oct, 2001 thru Nov, 1991 (9/11/2001 Attack plus Market Stresses) 
 Jul, 2002 thru Jun, 2003 
 Oct, 2008 thru May, 2009 (Financial Crisis) 
 Dec, 2009 thru Mar, 2010 
 Jul, 2010 thru Nov, 2010 
 Aug, 2011 thru Mar, 2012 
 Jun, 2012 thru Oct, 2012 
 Aug, 2015 thru Apr, 2016 (Intermittent but sustained at or near Proactive) 
 Dec, 2018 thru Mar, 2019 
 Mar, 2020 thru Jun, 2020 (Covid 19 "Crisis") 
 

Good morning JD, Re: Market Risk Histograms....................

Last week's data reminds us that market risk doesn't leave the system completely, but sometimes just hides from investors' eyes a while. Also, it's a reminder that shorter term predictions are just that, shorter. In both the v-Wave and the MRI's cases, we see the market risk is down substantially from the start of 2025. On a week to week basis, it's a bit less clear what the direction of risk might be. The MRI declined another point this week to its Median of 26% suggested cash. The v-Wave moved upward during the same time. These two are not the same, even if over the long term, they tend to follow the same general pattern. The MRI has smoothing math built in which make it a bit less 'reactionary' compared to the v-Wave on a weekly basis. Even so, the v-Wave is now at its Median value of 29% suggested cash for its 3-5 year forecast.





We can look inside the MRI with its four components where the v-Wave is not transparent for us. This week three of the four MRI components rose slightly in their risk assessment with one remaining unchanged. The MRI Speculation Index remains in its "Proactive" range while the other three are neutral. Even so, the MRI Oscillator is at minus 2, suggesting slow and further decline in market risk. Looking at the market indexes themselves we see Bulls and Bears still locked in their struggles. The Media is littered with forecasts about the economy and its direction. From where did all these economists and strategists surface? What are their own motives here? Are their pronouncements made to 'save' us or to irritate us?

Since our inventory management method is reactive rather than predictive, we need only to continue to follow the suggestions as to whether to build or reduce inventory. Right now my own portfolio's components are much closer to the "build" side. The majority of my positions are currently priced at or below their 26 Week Moving Average. One major exception is the gold surrogate, IAU, which hit new highs last week. I should also mention that out of the 1700 stocks reviewed weekly in Value Line, 11 of those stocks represent Gold/Precious Metals and are in the Top 41 Best Performers over the latest 13 weeks. That's a very strong sector showing. While slow to respond to its role as an inflation hedge, gold seems to have awakened. Here's a glimpse at the group from StockCharts:
https://stockcharts.com/freecharts/perf.php?AU,SSRM,WPM,KGC,AEM,MP,NEM,FNV,RGLD,GOLD,PAAS,IAU&n=200&O=011000
Default is 200 days on the x-axis, but you can stretch that out over many years. Results aren't completely in lockstep but long trends do show up. IAU sits in the middle of the main pack, showing there's speculative value in owning the actual mining companies if one wants that added "single stock risk."

Best wishes,
OAG Tom

Tomlinson's Paradox
"I have no choice but to believe in Free Will...."
- R.W. White

Re: AIM and Reason in Inventory Management for Equity Warehouses......................

Sometimes it's nice to look back on an AIM history to see how things have gone.




In this 3 year history of VUG (Vanguard Growth ETF) we see times when the markets were happy and other times when things weren't so grand. No matter the direction, AIM was proactively working on our behalf to keep us engaged but mindful of the changing dynamics of the market place. Warehouse inventory control, Sales and Cash Management have done an admirable job with this spicy holding. It hardly needs any Cholula Sauce at all!

Best wishes,
OAG Tom

Hi JD, Here's the histograms of the v-Wave and MRI for this week:


Rather rapid fall off of the 18 Month risk forecast this week! The 3-5 year shows it's below the Median level for the first time since the end of 2023.


(Note: I forgot to enter the years on the X-axis, Same as the v-Wave, 22 to Date)
Again, a nice drop in market risk is seen even when the S&P500 Index ticked up for last week.

Both the MRI and the v-Wave are showing 27% suggested cash reserve for AIM accounts right now. Two different sources of data but both lead to the same conclusion.

Best wishes,
OAG

Thanks JD,
Sometimes the data takes some time to catch up to realities. A preliminary review of the MRI data shows Speculation will be bullish and Relative Valuation will be solidly neutral. I'm still collecting the rest of the raw material for Divergence and IPO activity.
So, my guess is we'll have a better MRI number than we've had for quite a while, too.


OAG Tom

Wow! Now where did I put those Dramamine pills?
😎
It's not often I've sailed seas as rough as these.

OAG

Hi Toof,
Nice work!
I snagged some VTV, VB AND VBR today. First round on all of these.
OAG Tom

New Image from the Movie, "Forbidden Markets"
Robbie A.I. Robot tells traders to Sell All!!!



😎
OAG

My haiku for the Day...................

Please wear Chainmail Gloves
if you reach for falling knives
and keep Band-Aids near!

Please wear Chainmail Gloves
if you reach for falling knives
and keep Band-Aids near!

MESA up tremendously on a terrible day in the markets.
Whoda Thunk!

Mesa to merge with Republic Air to become a regional force.
https://finance.yahoo.com/news/regional-airlines-republic-airways-mesa-125046353.html

Best wishes,
OAG

Hi DG, Re: Insiders at AAPL selling shares.........................

I bought some of those shares Friday at $193.93 because I felt sorry for them. I added 13% more shares. I'd liberated shares in December of 2024 at $240+. so the buy represented nearly a 20% discount.

Best wishes,
OAG

With a current yield of ~10% at Friday's price/share, DOW might start to gain some support here.

OAG

With a year's warning
this is no Black Swan event.
Just an unravel.

When valuations, speculation and market sentiment all weave together in apparent support, markets rise. Snip just one of those threads and the rope suspending the markets at "too high" a level will start to fray. It will play out now with or without A.I. robot trading. Stick to good stock inventory management and recovery will come.

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

Open wounds Bleeding
From a Black Swan or Banshie?
The cause is unknown......

I think I smell Robot Lube Oil when visiting the Stock Market Trading Floor. Robbie (AI) Robot seems to have had his way with traders this last week.

With my dividend payers, the AIM Buy targets are with more generous yields than when AIM was last selling. Price/share down, Yield percentage up!

OAG Tom

Good morning EU,

Over on our AIM board, there's been some discussion about the last week's market action and their own reactions to it. I, too, reacted by using up at least some of my reserves of cash in adding back share inventory in proportion to the price declines.

Best wishes,
OAG Tom

Hi Steve,
I thought Andy did a great job on taking on AIM's activities after getting going with Newport. We also shared some great lunches over time.

He's here in our memories,

OAG Tom

Hi Jake, Re: "next move" of the markets..............

I thought I smelled some robot lubricating oil as the markets tanked. Maybe Robbie (AI) Robot was back there fiddling with the wires and flexing his hydraulics.

I find AIM's 20/20 hindsight to be far better than my 50/50 guesses about the future! I'll look at my holdings and set some GTC Limit orders over the weekend. Then, next week, we'll see what happens.

Congratulations on your activities so far.

Best wishes,
OAG Tom

Hi Adam, Re: International Equity Warehouse Activity............

After Spring Break, the Purchasing Department arrived back just in time to get busy. There hadn't been much purchasing activity leading up to this last week, but Thursday and Friday saw some interesting discounts showing up and some chances to rebuild share inventories.

Here's how my IRA looked at yesterday's close. This account had been a Twinvest (contributory IRA) account until January of 2024 but is now an AIM managed holding. VUG is Vanguard's "growth" ETF and is balanced with Cash in this portfolio. Cash is partly MMF and partly higher yielding bond fund.


An early Buy back when the price/share dropped below the 26 week moving average was just a small addition to inventory. Yesterday's decline allowed for a 13% increase in share count, however. Here's how it looks in the Stacked Bar histogram:


The purchase used up roughly half of the available Reserve, showing AIM's "proportional" buying nature. Small moves, small reaction - bigger moves, bigger reactions.

In my common stock portfolio (Sandbox) a couple of limit orders tripped. In my international style portfolio prices dropped significantly, but no trades have yet to occur. That account had been near all time record high levels and doing well through the end of March. I'll be checking to see if some of the price changes are close to AIM targets now. In my U.S. Domestic Sector portfolio several buys were triggered. Of note were the Tech and Materials sectors (RSPT and RSPM) which occurred on Thursday while Industrials (RSPN) tripped a buy on Friday. Those buys shifted the overall Equity/Cash balance a bit, but there's still a nice reserve left.

So, the Purchasing Department went home Friday with a satisfied look on their faces, even if it was a busy day.

Best wishes,
OAG Tom

I can't resist a good Sale. JETS on sale at a 27% discount from our last selling price.



Best wishes,
OAG

March didn't turn out to be "stellar" this year. For some of the portfolios it was a tough month.

Starting off with my growth IRA account:

(Cash = 22%, One buy during the month)

U.S. Domestic Equal Weight Sector ETF Portfolio:

(19% Cash, no trades yet)

My IRA with 10 common stocks:

(21% Cash, 3 buys during the month)

International portfolio of 9 ETFs in Large, Mid and Small Caps as Growth, Income and Emerging Markets:

(27% Cash, 3 Sell trades in the last two months)

With International being the only highlight for March, it was both unexpected and appreciated. The other portfolios were caught up in the "noise" of what was going on in the markets. Modest changes in prices produced modest activities and inventory changes in some with the U.S. Sector portfolio going tradeless for the month.

Noted in my other portfolio, an IRA, is that the Gold Surrogate, IAU, has grown from being the smallest position to being the largest position in the last 12 months. That's occurred even with AIM trimming back on the holding along the way.
https://schrts.co/ICQjsUvH
A very nice turn of events for that portfolio.

Best wishes,
OAG Tom

I posted my weekly risk report on LinkedIn this AM for those who would like to read it:
https://www.linkedin.com/feed/update/urn:li:activity:7312482304973537280/
Best wishes,
OAG Tom

Hi JD, Re: v-Wave and MRI risk outlook.......................................

That dip a couple of weeks ago in the 18 Month vW seems to have been a bit too optimistic at the time. Now the two time frames are showing an upward crossover.


SignalPoint's MRI has shown similar trend in risk to the v-Wave, but has been a bit slower to respond.


I guess we have to await tomorrow's close to know how March Stock Madness turns out. Right now only my International "Style" ETF portfolio is "up" for the month. I note that only my "sandbox" 10 stock portfolio did any buying in March as of last Friday. My other ETF portfolios all treaded water in rough seas.

Best wishes,
OAG Tom

Hi JFB, Re: Cash burn rate for standard AIM.............................

This table shows draw down in a different way. It was done as an example of what happens to an investment as price/share drops.
https://web.archive.org/web/20120610011525id_/http://www.aim-users.com/cashburn.htm
Nobody turned the data into a graph, however. Maybe I'll take a stab at it later today.
Thanks and Best wishes,
OAG Tom

Q) - Is CASH a "Four Letter Word?".....................

A) -Ladies and Gentlemen,

I was talking with a friend recently and we were discussing whether CASH is an Anglo-Saxon Four Letter Word! During 2024 it seems that sidelining cash was missing an opportunity. However, that's only if we consider Cash's value vs turning it into risk.

I suggested that for any portfolio, cash can be an inexpensive insurance policy. While not a magic bullet, it does offer some cushioning during short term downturns. If nasty bear markets come along it offers its true value as portfolio insurance. It can be used to build out a portfolio during the times that markets offer better value.

We buy cars and houses and don't think twice about having insurance on those items. It's just a cost added to the ownership. Does Car Insurance prevent us from getting into accidents? Does home insurance prevent flooding, fire or other damage to the structure? As I said, insurance isn't a magic bullet. It's only there to help recover from unexpected damages.

During much of the first two decades of the New Millennium truly cash had very little value when sitting on the side. Except for occasions like 2000, 2003, 2008-09, 2011, 2015, 2018, and 2022 it didn't do us much good! During those years Cash did an admirable job of building out our various portfolio strategies. However, with the joys of Inflation came better yield on cash. Now the cash segment of our portfolios is at least pulling some of its own weight. It's earning at better than 2x the average yield on stocks right now. So, holding a portfolio of high priced stocks/funds is yielding dividends less than cash's yield. I guess we can ask at those times, "How much would our total portfolio go down without the cash buffer?" I noted that since the end of November, my Signal 10 U.S. Business Sector ETF portfolio has dropped 4.64% including its cash reserve. Without the cash, it dropped 5.59% on the "invested" side. So, the cash has provided its first benefit - acting as a buffer. Cash even went up in value ever so slightly with interest and dividends accumulation.


Should the ETFs continue to lose value, eventually our program will shift into Purchasing Mode. It takes between 15% and 20% decline from a previous share inventory reduction (incremental sales) before the program gets interested in spending any cash. Once that has happened, the second benefit of holding cash becomes apparent. Now it can rebuild share inventories in a proportional fashion as prices decline. That can continue as long as the cash holds out.

Where mutual funds and individual investors tend to hold the least amount of cash at or near market tops (see Norman Fosback's writings along with AAII) they also hold the greatest amount of cash at or near market lows. Our M.O. has that inverted. We tend to hold the greatest percentage in cash nearer market tops and, on occasion, run cash to zero near market lows. In the recent 2022-2023 decline the Signal 10 Sector ETF portfolio drew down the cash by roughly half while buying up lots of shares. My smile would have been greater had the decline been larger and the drawdown complete to zero cash. Still, those new shares provided extra profit for the portfolio during 2024. Here's how that portfolio looks as of the end of December:

So, we're again ready should the markets get funky.

I'm glad you've enjoyed my musings on market risk.

Best wishes for the New Year,

OAG Tom

EPD continues to hold up well in a market that seems to be confused.
https://schrts.co/vmDtwmxA
Accumulation/Distribution is holding up well in this tricky time frame.
Best wishes,
OAG Tom

Hi JD, Re: v-Wave ST vs LT Crossovers...............................

Once again the cross over of the shorter term and longer term v-Wave lines has temporarily shown a near term inflection in the Indexes.



I guess this doesn't mean there couldn't be some further downside, but at least the sell-off sems to be slowing.

The SignalPoint MRI has been a bit slower to acknowledge the sell off as being finished. But, it's still descending.



If nothing else, it's nice to have some of the market risk sublimate.

Best wishes,
OAG Tom

Re: Why the MRI Risk is Falling................................

Looking at the Speculation component of the MRI will give you some insight as to why the MRI risk is declining.



This is the Spec. Index's first journey into Proactive territory since 11/24/2023. It shows just how far speculation risk has dropped since last year's presidential election. Most of the recent drop has happened just in the last few weeks. This is Week 2 of proactive Speculation. Note that this can be breeding grounds for bouncy cats.

Best wishes,
OAG Tom

Re: SignalPoint Market Risk Indicator ...............................................

A similar story is shown in the MRI histogram. It is also showing 31% current cash recommendation, down 2 points from last week.


The "dead cat bounce" in 2022 isn't as well defined here with the MRI, mid year. However, there was a brief "Caution" signal at the end of that year. Should we expect one this time around? Note we're still a bit of distance above the Proactive level with both the MRI and the v-Wave measures. It's as though the Markets are offering us Hors d'oeuvre to get our appetites ready for the Main Course. From what I've been reading, some investors went straight for the dessert table. Mr. Lichello's proportional purchasing aspect of AIM will suit us well, however.

Best wishes,
OAG Tom

Hi Jon, Re: v-Wave histogram...........................

Since we're getting back toward reasonable v-Wave values, I thought looking back at 2022 might be instructive for those who feel the need to hurry their stock/fund purchases. Sometimes the pendulum stalls for a while before successfully reversing its direction.


Best wishes,
OAG Tom

Newton had bubbles
Gravity was the Lesson
I thought this was New!



😎
OAG Tom

Newton had bubbles
Gravity was the Lesson
I thought this was New!



😎
OAG Tom

For many investors that were 100% or more invested (with Margin) the last couple of weeks may have been somewhat painful. AIM has once again proved to be better using its 20/20 Hindsight rather than a 50/50 Guess about the future. The v-Wave did I nice job of suggesting caution as well. It's nice to see some of the market risk evaporate as the markets consolidate.


SignalPoint's MRI also shows a turning tide of market risk. Even if these two indicators aren't used directly, they certainly do a nice job of confirming what AIM does automatically.


v-Wave down one to 31% suggested cash; MRI down one to 34% suggested cash.......

Best wishes,
OAG Tom

Note: Of the 10 business sector ETFs in my U.S. Domestic ETF portfolio, only one is priced currently above its 26 Week Moving Average! All the rest are at or below that mark. While not quite time to buy, we're watching and waiting to see the whites of the Seller's eyes!

Best wishes,
OAG

Two months into 2025 and the markets seem a bit confused so far. Here's the various portfolios I maintain:

U.S. Sector ETF Composite Portfolio of 10 business sectors

(18% current cash reserve)

10 Company Stock Composite Portfolio

(22% current cash reserve)

Tom's Simple IRA, Now managed with AIM

(23% current cash in reserve)

9 International "Style" type ETFs covering Growth and Value in Small, Mid and Large Caps

(27% current cash reserve)

These portfolios were basically flat for February. The first two days of March haven't been very friendly with the exception of the components of the International Style ETFs. They've been holding up better. There's not much action as of yet, but there's cash available should we see a healthy decline. In the meantime, I'm keeping some powder dry.

Best wishes,
OAG Tom