Momo & Trend Metrics
I am monitoring monthly trends & momentum across various asset classes, given momentum and trends can provide a gauge on market direction & sentiment. Of course, reversals occur, but trends and momentum is a signal that has proven to be an effective tool in asset allocation. I am tracking the following assets:
The highest trailing returns asset over the 1, 3, & 6 month timeframe has been Gold.
The highest trailing returns asset over the 12 month timeframe has been ASX Accumulated index.
Gold and ASX accumulated index were the only asset classes with a positive return over the past 12 months.
The worst trailing returns over 1, 6, & 12 month timeframe has been long dated US bonds. Long duration growth stocks tend to be highly correlated to long duration bonds, and goes part of the way why some of the growth darlings have come back to earth over the past 12 months. The strong downward momentum in TLT does not bode well for these long duration equities.