RGB Stock Market Scorecard

The RGB Stock Market Scorecard offers a clear and concise summary of the overall state of the market, grounded in a weight-of-the-evidence approach.

The scorecard integrates technical indicators and credit indicators to provide a comprehensive view:

• Technical Indicators: Assess how the market is performing across short-, intermediate-, and long-term time frames.
• Credit Indicators: Gauge the health of the bond market, offering insights into the level of overall market risk.

By evaluating multiple indicators over multiple time horizons, the RGB Stock Market Scorecard provides a balanced perspective on market conditions, helping investors navigate the complexities of today's financial landscape.

To view the RGB Bond / Income Dashboard click here.

The RGB Stock Market Scorecard is an educational tool designed to provide an assessment of current market conditions as of the date specified based on different market and trading indicators. For a description of each indicator and our source of data illustrated for the indicator, see the disclosures below.  The information provided in the Stock Market Scorecard is provided for general information purposes and is not intended as investment advice. The Indicator Rating provides values of positive, neutral or negative to provide an overall assessment based on the indicator value.  Past performance is no guarantee of future results.

The Dynamic Equity Allocation Guide is based on a weight of the evidence approach using the indicators described in the Market Monitor. It is designed as a guide to overall market exposure for the equity portion of your portfolio and not an investment recommendation. The guide is best used to confirm your overall exposure to the market based on your personal tolerance for risk and investment approach.

The Dynamic Equity Allocation Guide is designed to provide investors overall guidance as to an approximate level of equity market exposure that may be appropriate for consideration for the equity portion of their portfolio as of the date noted. This is not meant to be an investment recommendation nor investment advice for any specific individual. The guide is based on the indicators within the selected categories from the RGB Stock Market Scorecard. Each Scorecard indicator is given a weight based on its current Indicator Rating and then averaged with the other indicators in that group. Each group has an overall 25% weighting. There is no guarantee that the Overall Equity Allocation or any investment in the equity markets will provide positive returns.

The Early Warning Model is designed to give investors an indication when the market has gone too far in one direction and whether it’s ripe for reversal in trend based on overbought / oversold and investor sentiment indicators. Like a rubber band that has been stretched too far, the market tends to snap back towards its mean. The gauges below provide a visual representation of the state of each indicator: Too Bullish is considered negative (red) and Too Bearish is considered positive (green).  The center (yellow) area indicates a neutral reading.

The Early Warning Guide is a tool designed to provide an indication when the market has moved too far in one direction which in our view means the probability of a counter trend rally is above average. For a description of each indicator and our source of data illustrated for the indicator, see the disclosures below. This is not investment advice and there is no guarantee the market will move in any one direction at any given time.

General Disclosure
This report expresses the opinions of Robert Bernstein and is provided by RGB Capital Group for general information purposes only. It does not constitute an offer to sell or a solicitation to buy a security and is not an offer to provide any specific investment advice. It has been prepared from data believed to be reliable, but no representation is being made as to its accuracy or completeness. While every effort is made to provide information free from errors, the data is obtained from third party sources and, as a result, complete accuracy cannot be guaranteed. Past performance is not a guarantee of future performance. Investing in securities involves risk of loss that clients should be prepared to bear. It is not possible to invest directly in an index.

Description of Indicators
The following describes each indicator in the Stock Market Scorecard.  All data is provided by www.fasttrack.net unless otherwise noted.

Secular Market Cycle—Secular (long-term) bull markets are defined by above average returns over an extended period of time. Secular bear markets are defined by long-term periods of flat or declining prices (i.e. below average returns). Secular cycles tend to last from 5 to 25 years.  The indicator rating is based solely on an assessment of market conditions by Robert Bernstein.
Cyclical Market Cycle—Cyclical bull and bear markets are shorter trends within the context of secular (long-term) trend. There can be several cyclical bull and bear markets within a secular bull/bear market. For purposes of the stock Market Scorecard a cyclical bull market is a rise in the DJIA of 30% over 50 calendar days or a rise of 13% after 155 calendar days. A cyclical bear market is a 30% decline over 50 calendar days or a 13% decline after 145 days. This definition of cyclical bull and bear markets was first defined by Ned Davis Research.
Short-Term Trend Rating – An indicator designed to identify the status of the stock market’s short-term (0-3 weeks) trend.  The indicator uses the crossover of the 5-day and 10-day exponential moving averages of the S&P 500 Index.  When the 5-day EMA is above the 10-day EMA, the indicator is considered positive.  When the 5-day EMA is below the 10-day EMA, the indicator is considered negative.  
Intermediate-Term Trend Rating – An indicator designed to identify the status of the stock market’s intermediate-term (3 weeks to 6 months) trend. The indicator uses the crossover of the 5-week and 10-week exponential moving averages of the S&P 500 Index.  When the 5-week EMA is above the 10-week EMA, the indicator is considered positive.  When the 5-week EMA is below the 10-week EMA, the indicator is considered negative.  
Long-Term Trend Rating – An indicator designed to identify the status of the stock market’s longer-term (>6 months) trend. The indicator incorporates the 50-day moving average of the S&P 500 relative to the 200-day moving average. When the 50-day moving average is above 200-day moving average, the indicator is positive and vice versa.
Short-Term Momentum Rating – An oscillator designed to express the short-term momentum in the market.  This is a five day Rate of Change (ROC) indicator that measures the percentage change in price of the S&P 500 Index between the current price and the price five days ago.  A ROC greater than 1% will generate a positive reading.  A ROC value less than 1% will generate a negative reading.  All values between -1% and +1% are considered neutral.
Intermediate-Term Momentum Rating –  an indicator that uses the Average Directional Index (ADX) indicator to measure the strength of a trend, regardless of its direction. If the 14-day ADX reading is above its reading from 2-days prior, it is considered a positive trend.  This indicator then uses the Directional Movement System, developed by J. Welles Wilder Jr., to determine the direction of the trend by comparing the +DI (Positive Directional Indicator) to -DI (Negative Directional Indicator).  If the 14-day ADX reading is above its reading from two days prior and the +DI is great than -DI, the trend is up (positive).  If the 14-day ADX reading is below its value from two days prior and the +DI is less than -DI, the trend is down (negative).  If the 14-day ADX reading is below its reading from two days prior the overall rating is neutral. 
Long-Term Momentum Model – uses the Moving Average Convergence Divergence indicator on the S&P 500 Index to provide an indication of the momentum in the stock market.  A MACD (26, 52, 18) is used.  If the MACD line is above its 18-period exponential moving average, then the indicator is positive.  If the MACD line falls below its moving average, the indicator will provide a negative reading.
Short-Term Market Breadth: Short-term market breadth is determined by the cumulative number of advancing and declining stocks on the S&P 500 Index and comparing the value to its 21-day exponential moving average.  Any value above the 21-day EMA is considered positive and values below the 21-day EMA is considered negative.
Intermediate-Term Market Breadth: Intermediate-term market breadth is determined by the cumulative number of advancing and declining stocks on the NYSE Index and comparing the value to its 50-day exponential moving average.  Any value above the 50-day EMA is considered positive and values below the 50-day EMA is considered negative.
Long-Term Market Breadth: Uses the S&P 500 52-Week New Highs/New Lows Percentage.  The New Highs/Lows Percentage is based on the net new highs and new lows each day and divided by the number of stocks in the index.  The resulting value is then added on to the previous days cumulative total and compared to its 50-day moving average.  Values above the 50-day moving average are considered positive and vice versa.
Short-Term Credit Conditions Model: Based on the BAML High-Yield Master II Index (junk bond index).  Junk bonds are one of the best indicators of overall market sentiment. When risk rises, junk bond prices fall as investors demand a higher yield to compensate them for the additional risk (remember bond prices fall as yields rise). When risk subsides, junk bond yields tend to fall given more favorable market conditions (i.e. lower risk). Falling yields drive junk bond prices higher. On a short-term basis, junk bonds trending above their 50-day moving average is an indication of a healthy market environment.
Intermediate-Term Credit Conditions Model: Based on the BAML High-Yield Master II Index (junk bond index). Junk bonds are one of the best indicators of overall market sentiment. When risk rises, junk bond prices fall as investors demand a higher yield to compensate them for the additional risk (remember bond prices fall as yields rise). When risk subsides, junk bond yields tend to fall given more favorable market conditions (i.e. lower risk). Falling yields drive junk bond prices higher. Using a 30-day and 126-day moving average cross-over provides a good indication of the intermediate-term credit conditions. 
Long-Term Credit Conditions Model: High yield bond spreads (the difference between the yield on the the BAML High-Yield Master II Index and equivalent dated US Treasury bonds), provide clues to the level of risk in the market.  When the spread is above 600 basis points, market risk is considered elevated and will generate a negative reading.  Readings below 400 are considered lower risk and will display a positive reading.  All readings between 400 and 600 are neutral.
Short-Term Overbought/Oversold Signal: A signal based on the 2-day RSI on the S&P 500 Index. The indicator is positive when the RSI is below the 30-level, negative when the indicator is above the 70 level and neutral when the RSI value is between 30 and 70. 
Intermediate-Term Overbought/Oversold Signal: An indicator that uses the stochastics of the S&P 500 daily chart. %K is set at 14. %D is set at 3. The indicator is positive when %K is below the 20-level. The indicator is negative when %K is above 80. The indicator is neutral when %K is between 20 and 80. 
Long-Term Overbought/Oversold Signal: A signal based on the 14-day RSI on the S&P 500 Index. The indicator is positive when the RSI is below the 30-level, negative when the indicator is above the 70 level and neutral when the RSI value is between 30 and 70. 
Professional Investor Sentiment: Based on the NAAIM Exposure Index published by the National Association of Active Investment Managers (NAAIM).  The index represents the average equity exposure to the US equity markets by the professional investors and financial advisors that belong to the organization.  The current reading is compared to its mean.  Values greater than 1 standard deviation above the mean is considered Too Bullish (negative) and values less than 1 standard deviation below the mean are considered Too Bearish (positive).  All values within +1 and -1 standard deviations are considered neutral.
Individual Investor Sentiment: Based on the AAI Sentiment Survey published by the American Association of Individual Investors (AAII).  AAII members are polled weekly and asked if what direction they believe the stock market will move in the next six months.  This indicator uses the Bull/Bear Spread (the difference between the % of respondents that believe the market will be higher in six months less the % of respondents that believe the market will be lower in six months.  The value is then compared to its mean.  Values greater than 1 standard deviation above the mean is considered Too Bullish (negative) and values less than 1 standard deviation below the mean are considered Too Bearish (positive).  All values within +1 and -1 standard deviations are considered neutral. 

Description of Indices
S&P 500 Composite Index: The Standard and Poor's 500 Index (S&P 500) is a market capitalization-weighted index that measures the performance of 500 of the largest publicly traded companies in the United States. It is widely regarded as a benchmark for the overall performance of the U.S. equity market, representing a diverse range of industries and sectors..
NYSE Composite Index: The New York Stock Exchange Composite Index is a market capitalization-weighted index that measures the performance of all common stocks listed on the New York Stock Exchange, including domestic and international companies across various industries. It provides a broad representation of the overall market activity and trends on the NYSE.
BAML High Yield Master II Index: The BAML High Yield Master II Index tracks the performance of below-investment-grade, U.S. dollar-denominated corporate bonds issued in the U.S. domestic market. It includes bonds with a maturity of at least one year and a minimum outstanding amount of $100 million, providing a comprehensive measure of the high-yield bond market.