Good Monday. After careful consideration, I have decided to make a change to the presentation of our market models and my oftentimes meandering morning market missives.

It has been brought to my attention that many websites now publish the number of minutes required to read the article. My brother, Mike, who is a skilled professional photographer at Michael Moenning Photography informed me last week that, according to LinkedIn, my report was an "18-minute read."

As you might suspect, my reaction to this news wasn't positive. In fact, I was horrified. The bottom line is I personally wouldn't want to spend 18 minutes reading ANYTHING - even if I did happen to be the author!

So, in keeping with the times, I've decided to create a series of more concise, bite-sized reports, which will be published on a daily basis. I've come up with the following publishing schedule:

• Market Model Monday - A review of my key market models designed to indicate the state of the primary market cycle
• Technical Tuesday - An analysis of the current state of the market's trend and momentum
• Early Warning Wednesday - An examination the potential for counter-trend moves
• Thesis Thursday - My take on the key market drivers (or whatever else may be running through my mind)
• Fundamental Friday - A look of the state of the market's fundamental factors

It is my sincere hope that you find the new schedule easier to consume and more beneficial to your investing endeavors.

Primary Cycle Market Models

We start each week with a review of the primary stock market cycles and our favorite long-term market models. The idea is to enter the week with a clear understanding of what type of market we are dealing with.

The Current State of the Primary Stock Market Cycles

(Click on image to enlarge)

* Source: Ned Davis Research (NDR) as of the date of publication. Historical returns are hypothetical average annual performances calculated by NDR. Past performances do not guarantee future results or profitability - NOT INDIVIDUAL INVESTMENT ADVICE.

The Secular Market Cycle

A secular bull market is defined as a period in which stock prices rise at an above-average rate for an extended period (think 5 years or longer) and suffer only relatively short intervening declines. A secular bear market is an extended period of flat or declining stock prices. Secular bull or bear markets typically consist of multiple cyclical bull and bear markets. Below is a monthly chart of the S&P 500 Index illustrating the current cycle, which we estimate began on March 9, 2009.

S&P 500 - Monthly

The Cyclical Market Cycle

A cyclical bull market requires a 30% rise in the DJIA after 50 calendar days or a 13% rise after 155 calendar days. Reversals of 30% in the Value Line Geometric Index since 1965 also qualify. A cyclical bear market requires a 30% drop in the DJIA after 50 calendar days or a 13% decline after 145 calendar days. Reversals of 30% in the Value Line Geometric Index also qualify. Below is a weekly chart of the S&P 500 illustrating the current cycle, which we estimate began on March 24, 2020.

S&P 500 - Weekly

(Click on image to enlarge)

The Current State of the Primary Cycle Market Models

We have hand-selected each model for this board and have utilized several of the models in our daily work for decades. Each of the models on the board is designed to provide a standalone reading of market health and each has a strong historical record of staying on the proper side of the market's primary trend. Taken together, the Primary Cycle Model board is intended to help determine the overall "state of the market."

There are no changes to report on the Primary Cycle board once again this week. However, it is worth noting that our Leading Indicators Model is teetering. This model is a series of 10 indicators that have historically shown tendencies to lead the market at major turning points. The good news is the current "signal" from the model is "buy." The bad news is the current reading is very close to turning negative. This doesn't mean it will slip into the red, but since this model has been known to provide timely sell signals, it is something I am watching closely. Overall, I continue to believe the Primary Cycle board supports the idea that stocks are currently in the midst of a cyclical bull market and suggests that the bulls should be given the benefit of any doubt.

* Source: Ned Davis Research (NDR) as of the date of publication. Historical returns are hypothetical average annual performances calculated by NDR. Past performances do not guarantee future results or profitability - NOT INDIVIDUAL INVESTMENT ADVICE.