Rating as of September 25, 2017: 4.5
Our Investment Environment (“IE”) Scale is based, primarily, on the net reading on our Tactical Asset & Sector Allocation Model (and associated Buy-Sell Index), which is derived from the readings on numerous leading economic and stock market trading indicators. However, other factors, such as Sector Relative Performance statistics and our Stock High-Relative-Price-Strength Index are also analyzed to determine the value of that scale.
Values for our IE Scale can range from 0 (the lowest possible value) to 10 (the highest possible value).
Values that are greater than 5 indicate that the investment environment is positive, according to the readings on our models, and that investors should allocate a large percentage of their financial market assets to equity securities.
Values that are less than 5 indicate that the investment environment is negative and that investors should allocate a small percentage of their assets to equities.
A reading of 5 on our IE Scale indicates that the investment environment is neutral, and that stock prices, in general, will trade in a volatile sideways range for several months.