News

Market snapshot

• Stocks: Despite the four-day week, the major stock indexes posted their first strong performance in some time. The S&P 500 advanced 3.4%, the NASDAQ rallied 4.4%, and the Russell 2000 rose 3.3%.

• Bonds: Bonds also did well. The U.S. Aggregate Bond ETF (AGG) rose 1.0%, and the 20-year Treasury bond ETF (TLT) gained 1.75.

• Gold: Gold futures closed the week at $4,696.60, up $172.30 per ounce, or 3.81%. The Trade-Weighted U.S. Dollar Index fell 0.13%.

• Market indicators and outlook: Technical indicators are mostly positive for stocks, as are the strategies. The economic environment is classified as Normal, which is historically positive for stocks, bonds, and gold but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility is High and Rising, which favors stocks over gold and then bonds.

***

For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Stocks

The stock market rallied strongly over the holiday-shortened week, in line with seasonal tendencies. However, as the chart above illustrates, those gains were not enough to move the market out of the downtrend that has been in place since the February highs.

In addition, the important 200-day moving average that I described as support in my last Market Update was subsequently broken, confirming the downtrend. That same moving average now becomes resistance, which could impede any reestablishment of an uptrend. The chart shows that we are at that resistance level.

Of course, the market downturn relates to the geopolitical consequences of the Iran conflict, which has driven oil prices substantially higher. As shown in the following chart, that surge has been accompanied by a decline in stock prices. Until the uncertainty surrounding the conflict is resolved, this relationship is likely to continue. At the moment, this seems to be a short-term manifestation, but hang on for the next chapter.

Despite the geopolitical uncertainty, a number of economic reports continue to clarify the health of the U.S. economy. And these reports are exceptionally good.

The ISM Manufacturing Index for March was stronger than expected, though we saw a rise in prices paid. That could be an inflationary concern. With the increase in oil prices, that result is not surprising.

Last week also brought very strong employment data. Nonfarm payrolls were substantially stronger than forecast, which has historically been associated with higher stock prices over the intermediate term. With that report came yet another downtick in the unemployment rate. Reflecting those positive trends, initial claims for unemployment benefits fell to their lowest level since 2022.

The good news was not confined to these economic sectors. A review of recent economic reports (Bespoke Diffusion Index) shows one of the highest levels on record for reports beating forecasts—second only to the post-COVID recovery period in October 2020.

The market has remained in the oversold status noted in my previous update. In fact, it has been in that state for more than 19 consecutive days. Historical data since 1953 suggest that such periods tend to occur near market lows, although weakness can persist for one to three additional months. However, in all of those instances, stocks were higher 12 months later, with an average gain of 15% (see the following chart).

We can also check all past 12-month periods of market history to determine which most resembles the last 12 months. Currently, Bespoke Investment Group finds the best match to be September 1998 through September 1999. Following that period, the S&P posted gains over the subsequent one-, three-, six-, nine-, and 12-month periods, with a maximum drawdown of just 2.34%.

Finally, since 1990, April has been the second-best month of the year for stocks, generating profits over 70% of the time. So perhaps we should chalk up last week’s strong performance simply to that. But in addition, it is rare for March to end with a gain of more than 1% on its final day and for that to be followed by a gain of more than 1% on the first trading day in April. It has happened just four times since 1991. In each instance, the NASDAQ rose over the following three and 12 months, with a maximum drawdown of just 6.29%.

The bottom line: We are largely at the mercy of the geopolitics of our time. As long as these forces drive oil prices higher, we can expect the established downtrend in equity prices to continue. But if the current conflict eases, many factors are aligned to take stock prices quickly higher.

Bonds

Since my last Market Update, bond prices have broken out above the topping formation first established in January of this year. As with stocks, that yield level is now acting as support for the new, higher range of bond yields. As a result, yields have moved to new intermediate-term highs, only to quickly decline back to those prior peak levels. From there, they have moved higher once again. This is a warning to stock and bond investors alike.

Like stocks, bond yields are tied to the ebb and flow of the present geopolitical environment. In addition, fundamental forces make it unlikely that the Federal Reserve will intervene and further reduce rates. Higher oil prices point to renewed inflationary pressure, while improving employment data suggest continued economic strength. Both work against near-term Fed easing, and, in turn, against the interests of bond investors. Hence, bond prices have been falling.

Meanwhile, the high-yield bond market continues to track stocks. It got a bit of a bounce last week but remains in a downtrend.

Gold

While gold has historically provided defense for portfolios when stocks have declined, it has so far failed to in the current environment. It has, however, moved back above its intermediate-term moving average.

Mark Haefele, Wall Street strategist and chief investment officer for UBS Global Wealth Management, reiterated his bullish estimates for gold in a research note last week. UBS forecasts the precious metal will rise 35% to $6,200 an ounce by the end of June, before easing back to $5,900 an ounce by year-end, citing rising U.S. debt, de-dollarization trends, and geopolitical tensions as structural drivers.

Meanwhile, the U.S. dollar has traded in a relatively narrow range following its quick ascent at the start of the Iran conflict. The fact that it has not moved higher is good news for gold investors, as gold typically falls in the face of a rising dollar.

The indicators

The short-term technical indicators of future stock market price changes that I watch are now mostly negative. Our QFC S&P Pattern Recognition strategy has just a 60% exposure to the S&P 500 Index as of Tuesday’s close.

Our QFC Political Seasonality Index (PSI) strategy returned to the stock market at the close on Thursday, March 12. It will remain fully invested until April 17. (Our QFC Political Seasonality Index—with all of the daily signals for 2026—is available post-login in our Weekly Performance Report section under the Domestic Tactical Equity category.)

FPI’s intermediate-term tactical equity strategies remain mixed, with a defensive bias. Classic continues 100% long equities. The Volatility Adjusted NASDAQ strategy has a 20% net short exposure to the NASDAQ 100. Systematic Advantage ended the week just 60% net long. Meanwhile, our QFC Self-adjusting Trend Following strategy continues in its defensive mode. Although our volatility measure has improved, the primary STF signal remains negative on stocks. QFC Dynamic Trends has also moved to a defensive position in the Quantified Eckhart Managed Futures Fund (QECTX).

Because the QFC Dynamic Trends, Volatility Adjusted NASDAQ, Systematic Advantage, QFC Self-adjusting Trend Following, and QFC S&P Pattern Recognition strategies can employ leverage, the investment positions may exceed 100%.

FPI’s Growth and Inflation measure, one of our Market Regime Indicators, shows that markets are in a Normal economic environment stage (inflation and GDP are growing). Historically, a Normal environment has occurred 75% of the time since 2003 and has been a positive regime state for stocks, bonds, and gold. Stocks have the highest rate of return in Normal periods. Gold has the second-highest return but has also experienced high drawdowns in these environments.

Our S&P volatility regime is registering a High and Rising reading. Since 2003, this environment favors stocks over gold and then bonds from an annualized return standpoint. Stocks have the highest drawdown risk among the three asset classes. Bonds have the lowest return, risk, and drawdown. The High and Rising combination has occurred 28% of the time since 2003.

Market Update 3/30/26

Tue, 31 Mar 2026 02:22:00 GMT

Market snapshot

• Stocks: The major U.S. stock market indexes were mostly lower last week. The NASDAQ Composite fell 3.22%, the S&P 500 declined 2.10%, the Dow Jones Industrial Average lost 0.90%, and the Russell 2000 gained 0.47%.

• Bonds: The 10-year Treasury bond yield rose from 4.39% to 4.44%.

• Gold: Spot gold rose 0.04%, closing above $4,400 an ounce.

• Market indicators and outlook: Market regime indicators show the market is in a Normal economic environment stage, which is historically positive for stocks, bonds, and gold but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility is High and Rising, which favors stocks over gold and then bonds.

***

For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Stocks

The SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500, finished the week below both its 50-day and 200-day moving averages.

Markets continued to decline amid heightened geopolitical tensions. Higher oil prices are seen as potentially destabilizing to the economy, and stocks are shifting from a sideways pattern toward a downward trend. The S&P 500 and NASDAQ 100 are now near the 10% drawdown level that signifies correction territory.

Strong fourth-quarter earnings and continued developments in AI technology have not been enough to support equity prices against the rising threat of inflation created by recent world events. It’s unclear if the downturn will end anytime soon without a corresponding improvement in geopolitical conditions.

Bonds

The iShares 7-10 Year Treasury Bond ETF (IEF), which tracks intermediate-term Treasury bonds, finished last week below both its 50-day and 200-day moving averages.

The recent oil supply shock has also weighed on bond prices. After trending higher earlier this year, bonds have turned lower in recent weeks as inflation concerns have reemerged. Oil is a foundational commodity, and price changes can easily flow through to other goods in the broader economy. With oil prices rising sharply, investors are worried that the Federal Reserve may have limited room to cut interest rates.

The Fed last cut interest rates in December of last year. Since then, it has held rates steady while monitoring the effects of prior policy changes on inflation and unemployment. With inflation once again a key concern, there is growing skepticism that further rate cuts are likely in the near term.

The next meeting of the Federal Open Market Committee is scheduled for the end of April. According to CME Group’s FedWatch tool, markets are currently pricing in a high probability that rates will remain unchanged at the meeting.

Gold

The SPDR Gold Shares ETF (GLD), which tracks the price of gold, finished the week below its 50-day moving average but above its 200-day moving average.

FPI’s indicators

The QFC S&P Pattern Recognition strategy’s primary signal started the week with a 70% net long exposure to the S&P 500. Exposure changed to 130% net long on Monday, 100% net long on Tuesday, and 80% net long on Friday.

Our QFC Political Seasonality Index strategy was aggressive throughout the week. (Our QFC Political Seasonality Index—with all of the daily signals—is available post-login in our Weekly Performance Report section under the Domestic Tactical Equity category.)

The Volatility Adjusted NASDAQ strategy started the week with a 40% net long exposure to the NASDAQ 100. Exposure changed to 20% net long on Thursday.

The Systematic Advantage strategy started the week with a 30% net long exposure to the S&P 500. Exposure changed to 60% net long on Wednesday.

Our QFC Self-adjusting Trend Following strategy’s primary signal was 0% net long the NASDAQ 100 throughout the week.

The Volatility Adjusted NASDAQ, Systematic Advantage, QFC Self-adjusting Trend Following, and QFC S&P Pattern Recognition strategies can all employ leverage, so the investment positions may at times exceed 100%.

Our Classic model remained in stocks throughout last week. Most of our Classic accounts follow a signal that will allow the strategy to change exposure in as little as a week. A few accounts are on platforms that are more restrictive and can take up to one month to generate a new signal.

Market Update 3/23/26

Tue, 24 Mar 2026 02:11:00 GMT

Market snapshot

• Equities: U.S. equities struggled for the fourth consecutive week. The S&P 500 fell around 1.87%, the NASDAQ Composite declined approximately 2.06%, the Dow Jones Industrial Average lost about 2.09%, and the small-cap Russell 2000 fell roughly 1.65%.

• Fixed income: Interest rates moved higher while bond prices sold off. The benchmark 10-year Treasury yield rose to 4.38%, continuing its recent move higher.

• Gold and commodities: Energy continued to rally amid tensions in the Middle East. Gold posted its worst week since 2011, falling 10.50%.

• Market indicators and outlook: Our strategies generally remained exposed, though some began to show caution given the current market environment. Market regime indicators show the market is in a Normal economic environment stage, which is historically positive for stocks, bonds, and gold but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility is High and Falling, which favors gold over bonds and then stocks.

***

For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Equities

Stocks attempted to stabilize last week, with a few brief rallies, but none gained traction. By Friday, selling pressure returned, and equities ended the week lower on rising oil prices, a cautious Federal Reserve, and ongoing geopolitical tensions. As a result, the S&P 500, Dow, and NASDAQ each posted a fourth straight weekly loss, while the Russell 2000 small-cap index entered correction territory, down just over 10% from its all-time high.

The Federal Reserve is no longer providing the same level of support for markets. Until recently, markets closely monitored Fed announcements, driven by expectations of continued low rates, which helped funnel money into equities and push markets higher. Last week, the Fed left rates unchanged between 3.50% and 3.75%, as expected, but struck a more cautious tone. Its statement noted that economic activity continues to expand at a solid pace, while job gains remain low and inflation is still somewhat elevated. That is not the kind of backdrop that gives investors confidence that easier policy is right around the corner.

Economic data was light during the week. February industrial production rose 0.2% following a 0.7% gain in January, suggesting that the supply side of the economy continues to expand, albeit at a slower pace.

Geopolitical developments remain a key factor. While the Trump administration has indicated that the conflict with Iran may be short-lived, Iran may view the situation differently. For Iran, particularly its leadership, the conflict is viewed as a significant threat. As a result, there is a risk that traffic through the Strait of Hormuz could remain disrupted longer than expected.

Bespoke Investment Group noted, “While Saudi Arabia is exporting roughly 4.2mm barrels per day via the Red Sea and Iran’s exports appear unimpacted, roughly 15% of global supply is stuck because of a conflict that only looks to be intensifying.”

For investors, this underscores the uncertainty that geopolitical events can introduce into financial markets and the broader economy. In that kind of environment, investment decisions are best grounded in a disciplined, rational approach rather than driven by fear or emotion. Quantitative and systematic models can help by using historical data to inform decision-making. While the past does not repeat exactly, it can provide useful context for how markets may behave under similar conditions.

Fixed income

Treasurys sold off on geopolitical concerns and the Federal Reserve’s cautious tone. The move was fairly significant, with the 10-year yield rising from 4.28 to 4.38%.

That move aligns with the broader inflation picture. February producer prices rose 0.7%, following a 0.5% increase in January. The headline consumer price index (CPI) had already come in at 2.4% year over year, with core CPI at 2.5%. Inflation is no longer at peak levels, but it is not low enough for the market—or the Fed—to fully relax, especially with oil prices moving higher. Bonds remain stuck in an uncomfortable middle ground, where slower growth could matter later, but inflation still matters now.

Bonds appear to be providing some stability, but the bigger concern is the potential for broad, correlated sell-offs that impact both equities and fixed income. Ideally, bonds would act as a stabilizing force when equity markets decline. Recently, though, they haven’t held up as well, with inflation still slightly above trend.

Gold and commodities

Commodities led the way last week, driven largely by energy. Oil prices rose on rising concerns about Middle East supply and potential disruptions in the Strait of Hormuz. Crude pushed higher, putting immediate pressure on inflation expectations. By Friday, Brent crude closed just over $112.

Gold, on the other hand, did not provide stability. The yellow metal lost 10.50% last week, declining from $5,019.49 to $4,492.42. Instead of benefiting from geopolitical uncertainty, it sold off. Higher yields and a stronger U.S. dollar added to the pressure. MarketWatch noted that gold suffered its worst weekly percentage decline since 2011.

Gold remains a valuable diversifier and has historically shown low correlation with stocks and bonds. However, this serves as a reminder that it is also sensitive to other macroeconomic factors, such as real rates and the U.S. dollar.

The indicators

QFC S&P Pattern Recognition strategy started the week 140% long, increased to 170% long on Monday, dropped to 160% long on Tuesday, cut back to 20% on Thursday, and increased to 70% long on Friday. Our QFC Political Seasonality Index started and ended the week in its risk-on posture. (Our QFC Political Seasonality Index—with all of the daily signals—is available post-login in our Weekly Performance Report section under the Domestic Tactical Equity category.)

The Volatility Adjusted NASDAQ strategy started and ended the week 40% long. The Systematic Advantage strategy started the week 60% long, moved to 30% long on Monday, returned to 60% long on Tuesday, and decreased to 30% long on Friday. Our QFC Self-adjusting Trend Following strategy started the week in cash, moved to 200% long on Tuesday, and moved back to cash on Thursday, where it remained for the rest of the week. These strategies can employ leverage, so their exposure may exceed 100% at times.

FPI’s Growth and Inflation measure—one of our Market Regime Indicators—shows that we are in a Normal economic environment, defined by positive monthly changes in both prices and GDP. A Normal environment has occurred 75% of the time since 2003 and has been positive for stocks, bonds, and gold. Stocks have delivered the highest rate of return in Normal periods, while gold has ranked second but has also experienced high drawdowns.

Our S&P volatility regime is registering a High and Falling reading, which favors gold over bonds and then stocks from an annualized return standpoint. The combination has occurred 13% of the time since 2003. It is a stage of strong returns for gold.

Market Update 3/17/26

Tue, 17 Mar 2026 17:40:00 GMT

Market snapshot

• Stocks: The major stock indexes posted losses again this past week. The S&P 500 fell 1.6%, the NASDAQ lost 1.3%, and the Russell 2000 declined 1.8%.

• Bonds: Bonds also had a rough time. The U.S. Aggregate Bond ETF (AGG) fell 0.9%, while the 20-year Treasury Bond ETF (TLT) dropped 2.2%.

• Gold: Gold futures closed the week at $5,048.80, down $109.90 per ounce, or 2.65%. The Trade-Weighted U.S. Dollar Index rose 1.50%.

• Market indicators and outlook: Technical indicators are mostly positive for stocks, as are the strategies. The economic environment is classified as Normal, favoring stocks, bonds, and gold, but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility is High and Falling, a regime historically favorable for gold over other asset classes on a return basis, although bonds eke out the top rank over gold on a risk-adjusted basis.

***

For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Stocks

Volatility has increased this year, as evidenced by the rising VIX fear index. The stock market indexes have crested and turned lower at a rate nearly matching the rise in the VIX.

Although it’s been just three weeks since the S&P 500 Index reached a new high, stocks have fallen in each of those three weeks, bringing the Index below its 50-day moving average. It is now threatening to fall below its 200-day moving average—an even more important breach. The initial defense of this traditional bastion between a bull and bear market appears to have been successful. If the long-term uptrend is to remain intact, this level must hold and avoid being broken for more than a few days.

It is no coincidence that geopolitical events leading up to the Iranian attacks have contributed to the increased volatility in equities. With these developments occurring in the heart of the Middle East, oil prices have soared, and fears of inflation have increased. This, in turn, has pressured equities.

While the negative factors affecting stocks have been apparent over the last three weeks, the positives are less so. From a technical standpoint, the continued viability of the long-term uptrend is perhaps the most visible positive. Less visible has been the rapid deterioration of internal indicators. These have slipped significantly, even as the indexes remain within 5% of new all-time highs. This is a rare occurrence, and while it may fit the script of providing evidence for further declines in equity prices, a decent contrarian case can also be made.

First, as of Friday, the S&P 500 had fallen more than three standard deviations below its 50-day moving average. Second, advance-decline weakness had fallen to first-decile levels—the lowest possible. Third, new 52-week lows for both the S&P 500 issues and its sectors have risen to extremely high levels. In the past, each of these seemingly negative signals has led to contrarian outcomes rather than a continuation of the trend. In each case, a high percentage of historical occurrences have seen prices rebound. So far, this week has followed that precedent.

The bottom line: With conflict in the Middle East and rising oil prices and interest rates, uncertainty abounds. The stock market seems likely to fall from here, but contrarian measures suggest a bounce first. Whether that successfully defends the long-term uptrend or instead proves to be a short-term bounce will likely depend on whether the conflict, which is driving the uncertainty, comes to a speedy end.

Bonds

Yields broke higher last week as rising oil prices dominated the headlines and cast doubt on the prospects for manageable inflation. Yields on the 10-year government bond rose back to their intermediate-term high-water mark. Monday’s action reversed precisely at that point. In the past, yields have been very range-bound and respectful of the trending highs and lows. So this could be the start of a new direction for rates, although they are also likely tied to the trend in oil prices and the Middle East conflict.

With rates rising, bond prices have been tumbling. However, like yields, they have reached support levels and may soon top their intermediate-term moving average.

Meanwhile, the high-yield bond market has fallen rapidly from its latest new high. Like stocks, though, it has fallen so quickly that the asset class has moved into oversold territory, an area from which it has historically moved higher.

Gold

While gold has historically provided defense for portfolios when stocks have declined, so far it has failed to do so. It has, however, stayed above its intermediate-term moving average, though it has been trading mostly below $5,000 per ounce during the three-week stock market decline.

The traditional contrarian relationship between gold and the U.S. dollar has continued. As the following chart shows, the dollar has moved higher alongside rising interest rates, while gold has fallen. To some extent, U.S. energy self-sufficiency may be contributing to a reemergence of the dollar’s safe-haven status during times of global uncertainty.

The indicators

The short-term technical indicators of future stock market price changes that I watch are now all negative. Our QFC S&P Pattern Recognition strategy, however, had a 160% exposure to the S&P 500 Index as of Tuesday’s close.

Our QFC Political Seasonality Index (PSI) strategy returned to the stock market at the close on March 12. It will remain fully invested until April 17. (Our QFC Political Seasonality Index—with all of the daily signals for 2026—is available post-login in our Weekly Performance Report section under the Domestic Tactical Equity category.)

FPI’s intermediate-term tactical equity strategies remain mixed with a positive bias. Classic continues 100% long equities. The Volatility Adjusted NASDAQ strategy finished the week at 40% net long exposure to the NASDAQ 100. Systematic Advantage ended the week 60% net long. Our QFC Self-adjusting Trend Following strategy exited its defensive mode at the close on March 17. QFC Dynamic Trends also moved to 200% invested.

Our S&P volatility regime is registering a High and Falling reading. Since 2003, this environment favors gold over stocks and then bonds from an annualized return standpoint. Gold has the highest drawdown risk among the three asset classes. The High and Falling combination has occurred 17% of the time since 2003.

Market Update 3/9/26

Tue, 10 Mar 2026 14:13:01 GMT

Market snapshot

Stocks: The major U.S. stock market indexes were lower last week. The Russell 2000 fell 4.03%, the Dow Jones Industrial Average declined 2.92%, the S&P 500 lost 1.99%, and the NASDAQ Composite decreased by 1.22%.
Bonds: The 10-year Treasury yield rose from 3.97% to 4.15%.
Gold: Spot gold fell 2.03% last week, closing above $5,100 an ounce.
Market indicators and outlook: Market regime indicators show the market is in a Normal economic environment, historically positive for stocks, bonds, and gold but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility is High and Rising, which favors stocks over gold and then bonds.

***

For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Stocks

The SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500, finished the week below its 50-day moving average but above its 200-day moving average.

Heightened tensions in the Middle East have led to a flurry of events in financial markets. Oil prices have surged amid supply concerns, and volatility has increased as uncertainty grows around potential developments. U.S. equity markets declined in response.

Investors had already been uneasy since late last year. Concerns that productivity gains from AI might not materialize as quickly as hoped contributed to the sideways market trend. A weak employment report released last Friday added to those concerns.

With most fourth-quarter 2025 earnings reports now behind us, investors will be watching the economy closely for impacts from the recent oil shock. The latest earnings numbers came in strong, but supply-chain disruptions could lead to greater uncertainty about 2026 profits. The market still hopes that advances in AI will translate into strong economic growth.

Bonds

The iShares 7-10 Year Treasury Bond ETF (IEF), which tracks intermediate-term Treasury bonds, finished the week above both its 50-day and 200-day moving averages.

Despite recent stock market volatility, bonds have not served in their traditional role as a safe-haven asset. Instead, they have pulled back alongside stocks. This could be due to inflation concerns driven by the spike in oil prices. Higher energy costs can ripple through the economy, potentially reducing the Federal Reserve’s willingness to lower interest rates.

The Fed left its target policy rate range unchanged at its January meeting. The Federal Open Market Committee will meet next week to consider whether to adjust the policy rate. CME Group’s FedWatch tool shows investors currently assigning a high probability to no rate change at the meeting.

Gold

The SPDR Gold Shares ETF (GLD), which tracks the price of gold, finished the week above both its 50-day and 200-day moving averages.

FPI’s indicators

The QFC S&P Pattern Recognition strategy’s primary signal held a 200% net long exposure to the S&P 500 throughout the week.

The Volatility Adjusted NASDAQ strategy started the week with a 40% net long exposure to the NASDAQ 100. Exposure increased to 80% net long on Monday, declined to 60% net long on Wednesday, and returned to 40% net long on Thursday.

The Systematic Advantage strategy started the week with a 90% net long exposure to the S&P 500. Exposure decreased to 60% net long on Monday.

Our QFC Self-adjusting Trend Following strategy’s primary signal was 200% net long the NASDAQ 100 going into the week. Exposure changed to 0% on Monday and returned to 200% net long on Wednesday.

Volatility Adjusted NASDAQ, Systematic Advantage, QFC Self-adjusting Trend Following, and the QFC S&P Pattern Recognition strategies can all employ leverage, so the investment positions may at times exceed 100%.

Market Update 3/2/26

Tue, 03 Mar 2026 03:15:00 GMT

Market snapshot

• Equities: U.S. equities struggled last week on softer sentiment, geopolitical headlines, and renewed rate uncertainty. The S&P 500 fell 0.42%, the NASDAQ Composite lost 0.94%, the Dow Jones Industrial Average declined 1.28%, and the small-cap Russell 2000 decreased by 1.15%.

• Fixed income: Interest rates fell as investors moved toward safety and priced in a greater likelihood of rate cuts. The benchmark 10-year Treasury yield dropped to 3.94%.

• Gold and commodities: Gold gained 3.36%, and oil prices advanced amid renewed geopolitical concerns.

• Market indicators and outlook: Our strategies remained broadly bullish, with most models in risk-on positioning and several using elevated exposure. Market regime indicators point to a Normal economic environment, historically positive for stocks, bonds, and gold but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility is High and Rising, which favors stocks over gold and then bonds.

***

For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Equities

Stocks declined as investors weighed inflation data, labor market signals, and geopolitical developments.

The producer price index (PPI) was the key release. While consumer inflation has moderated, PPI came in firmer than expected, reminding markets that upstream pricing pressures have not fully disappeared. Persistent producer inflation can filter into consumer prices and corporate margins. The market reaction wasn’t dramatic, but it was enough to keep investors cautious about the pace of potential Federal Reserve rate cuts.

Weekly unemployment claims remain relatively contained, suggesting the labor market has not meaningfully deteriorated, though the recent uptick supports the broader narrative of gradual economic slowing. Concerns about automation and AI also resurfaced following significant workforce reductions at Block Inc. In announcing layoffs of 4,000 of its 10,000 employees, CEO Jack Dorsey said, “The core thesis is simple. Intelligence tools have changed what it means to build and run a company.”

Leadership remained narrow. Growth and technology stocks saw intermittent pressure, particularly when yields attempted to stabilize midweek. Financials were mixed, and small caps struggled to gain traction as investors remained selective.

The price action reflected consolidation rather than panic selling. Trading volumes were elevated at times, but there was no evidence of systemic stress. The pullback appeared consistent with digestion following an extended advance earlier in the quarter.

Equities remain near historically elevated levels. Markets at these levels often require either a clear acceleration in growth or a decisive move lower in rates to push to new highs. Without that confirmation, digestion periods are common.

Geopolitical developments also drew attention. Over the weekend, the United States and Israel conducted coordinated strikes in Iran that targeted military and infrastructure assets and resulted in the death of Iran’s supreme leader, Ayatollah Ali Khamenei. Iran responded with retaliatory actions in the region. The exchanges were described as calibrated rather than escalatory, but they renewed concerns about instability in the Middle East. As of Sunday evening, futures reactions were contained, though energy prices firmed as investors reassessed geopolitical risk.

Fixed income

Treasurys strengthened as equities softened. The 10-year yield fell from 4.09% to 3.94%.

Bond investors appear to be pricing in slower growth rather than a resurgence in inflation. While inflation remains above the Federal Reserve’s long-term target, the trajectory has improved, giving fixed-income markets room to breathe.

The front end of the yield curve remains sensitive to policy expectations. Investors continue to debate when the Federal Reserve may begin easing. While consensus still centers around midyear, confidence in that timing has fluctuated week to week based on incoming data.

Lower yields helped offset equity weakness and supported broader financial conditions. Credit spreads remain contained, suggesting that risk aversion has not spread into funding markets.

For now, bonds are behaving as they traditionally do during periods of equity hesitation, offering ballast rather than volatility. As active managers, we believe fixed income can be used both structurally and tactically—increasing and decreasing exposure as trends and market conditions warrant.

Gold and commodities

Gold advanced 3.36% during the week, supported by lower real yields and geopolitical tension. The metal remains sensitive to shifts in rate expectations. As Treasury yields declined, gold strengthened.

Energy markets were also firm. Oil prices were volatile but ended higher as geopolitical concerns resurfaced, particularly in regions central to global supply chains. Even modest changes in perceived supply risk can move energy markets quickly.

Recent commodity moves appear driven more by positioning and headlines than by structural shifts in demand. That does not invalidate the moves, but it does suggest that volatility may remain elevated.

During risk-off periods, gold often attracts incremental flows. As developments in Iran continue, demand for gold and other metals may persist. However, geopolitically driven moves tend to be reactive, underscoring the importance of maintaining a disciplined approach when volatility rises.

The indicators

The QFC S&P Pattern Recognition strategy started and ended the week 200% long. Our QFC Political Seasonality Index began the week in its risk-off posture, switching to its risk-on posture on Thursday. (The QFC Political Seasonality Index—with all of the daily signals—is available post-login in our Weekly Performance Report section under the Domestic Tactical Equity category.)

The Volatility Adjusted NASDAQ strategy started the week 60% long, reduced exposure to 40% long on Tuesday’s close, returned to 60% long on Wednesday, and dropped back to 40% long on Friday’s close. The Systematic Advantage strategy started and ended the week 60% long. Our QFC Self-adjusting Trend Following strategy started the week 200% long, moved to cash on Tuesday’s close, and returned to 200% long on Wednesday’s close. These strategies can employ leverage, so their exposure may exceed 100% at times.

Market Update 2/23/26

Tue, 24 Feb 2026 03:17:00 GMT

Market snapshot

• Stocks: The major U.S. stock market indexes were higher last week. The Dow Jones Industrial Average rose 0.29%, the Russell 2000 gained 0.67%, the S&P 500 advanced 1.11%, and the NASDAQ Composite increased by 1.53%.

• Bonds: The 10-year Treasury bond yield rose from 4.04% to 4.08%.

• Gold: Spot gold rose 1.30% last week, closing above $5,100 an ounce.

***

For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Stocks

The SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500, finished the week above both its 50-day and 200-day moving averages.

The market remains in the sideways range that has been in place since the fall. That has occurred even as fourth-quarter earnings have largely been reported and following last Friday’s Supreme Court decision striking down tariffs that President Trump had focused on throughout last year. Markets moved slightly higher on the news.

According to FactSet’s Earnings Insight report, revenue and earnings-per-share surprises have skewed to the upside. Blended earnings growth stands at 13.2%, a very healthy number. Valuations sit above both the five-year and 10-year averages, reflecting that strength.

Bonds

The iShares 7-10 Year Treasury Bond ETF (IEF), which tracks intermediate-term Treasury bonds, finished last week above both its 50-day and 200-day moving averages.

Bonds have moved higher over the past month. January inflation levels were in line with previous months, and 12-month inflation was in the mid-2% range. With inflation appearing to stabilize slightly above the Federal Reserve’s long-term 2% target, investors may be more comfortable moving into longer-dated bonds.

The Federal Reserve left interest rates unchanged at its January meeting. Two meetings remain before Chair Jerome Powell’s term expires, with the next scheduled for mid-March. CME Group’s FedWatch tool shows the market is assigning a high probability to no rate change at that meeting.

Gold

The SPDR Gold Shares ETF (GLD), which tracks the price of gold, finished the week above both its 50-day and 200-day moving averages.

FPI’s indicators

The QFC S&P Pattern Recognition strategy’s primary signal started the week with a 190% net long exposure to the S&P 500. That changed to 200% net long on Tuesday.

Our QFC Political Seasonality Index strategy was aggressive at the beginning of the week but shifted to a defensive posture on Tuesday. (Our QFC Political Seasonality Index—with all of the daily signals—is available post-login in our Weekly Performance Report section under the Domestic Tactical Equity category.)

The Volatility Adjusted NASDAQ strategy held a 40% net long exposure to the NASDAQ 100 throughout the week.

The Systematic Advantage strategy started the week with a 60% net long exposure to the S&P 500. Exposure changed to 90% net long on Thursday.

Our QFC Self-adjusting Trend Following strategy’s primary signal was 200% net long the NASDAQ 100 throughout the week.

The Volatility Adjusted NASDAQ, Systematic Advantage, QFC Self-adjusting Trend Following, and QFC S&P Pattern Recognition strategies can all employ leverage, so their investment positions may at times exceed 100%.

Market Update 2/17/26

Wed, 18 Feb 2026 03:35:00 GMT

Market snapshot

• Equities: The S&P 500 lost 1.35%, the NASDAQ Composite dropped 2.08%, the Dow Jones Industrial Average declined 1.15%, and the small-cap Russell 2000 fell 0.85%.

• Fixed income: The benchmark 10-year Treasury yield fell to around 4.05% from 4.21% on better-than-expected inflation numbers.

• Gold: After a brief midweek pullback, gold prices rose 1.56% to end the week at $5,042.04 per ounce.

• Market indicators and outlook: Our strategies were broadly bullish. Most maintained risk-on or long positioning, with some levered strategies using most or all of their available leverage. Market regime indicators show the market is in a Normal economic environment, which is historically positive for stocks, bonds, and gold, but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility is High and Rising, which favors stocks over gold and then bonds.

***

For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Equities

It was a rough week for stocks. The S&P 500 dropped 1.35% to close at 6,836, leaving it about 2% below its late-January high. Thursday did most of the damage, as a wave of selling hit tech and growth names hard.

A few things came together at once. Alphabet’s earnings call spooked investors after the company projected as much as $185 billion in AI-related capital spending for 2026. That’s a big number, and it raised fresh questions about whether all of this AI investment will pay off anytime soon. Software stocks got hit particularly hard on worries that AI tools might start eating into their businesses. Retail sales were also muted, with no change for the month. Analysts had forecast a 0.3% increase in core retail sales and a 0.4% rise in the headline figure.

Earlier in the week, the mood was more positive. The Dow crossed 50,000 for the first time, and Wednesday’s jobs report came in hot—130,000 new jobs versus the 66,000 Wall Street expected. Health care and construction led the hiring. But by Thursday, none of that mattered. The Russell 2000 fell about 2% in a single session.

Friday brought some relief. January’s inflation report showed prices rising just 2.4% year over year, the slowest pace since May and better than the 2.5% economists expected. Core inflation fell to 2.5%, its lowest since early 2021. That helped calm nerves a bit, and stocks stabilized heading into the long weekend.

Equities remain near all-time highs and appear to be searching for a reason to break through the current ceiling. Traders are looking for confirming signals that the bull market remains intact.

Fixed Income

Bonds had a good week as investors sought safety. The 10-year Treasury yield fell to 4.05% by Friday, its lowest level since early December and down from 4.21% at the start of the week.

The move made sense given what was happening elsewhere. Stocks were selling off, and the economic data was softer than expected, broadly speaking. December retail sales came in flat, missing expectations, and existing home sales posted their largest decline since 2022. Wednesday’s stronger jobs report pushed yields up briefly, but that didn’t last.

Friday’s Consumer Price Index report really moved the needle. With inflation coming in cooler than expected, traders started pricing in more rate cuts for this year. Most expect the Federal Reserve to hold steady until June, then start cutting.

There’s still a lot of uncertainty around Fed policy. Kevin Warsh takes over as chair in May, and he’s been vocal about shrinking the Fed’s balance sheet. But he’s also hinted at working with the Treasury to bring yields down. How that plays out is anyone’s guess. For now, cooler inflation and softer growth data are supporting demand for Treasurys.

Gold and commodities

Gold remains volatile. After spending much of the week recovering from January’s historic sell-off, the metal got caught up in Thursday’s broad market rout. It touched a low near $4,871 before bouncing back to close around $5,042, up 1.56% for the week.

January’s crash is still fresh. Gold peaked near $5,600 earlier this year before plunging 11% in a single day on January 30, its largest one-day drop since the early 1980s. Silver fell even harder, down 36% in one session. Prices have stabilized since then, but traders appear to be more sensitive to sharp moves, and volatility remains elevated.

Thursday’s drop wasn’t really about gold specifically. It was part of the broader risk-off move as tech stocks cratered. Silver fell more than 11% before recovering some ground. When everything sells off together like that, it’s usually about positioning and liquidity, not fundamentals.

The bigger picture still looks supportive for gold. Central banks keep buying—China extended its gold purchases for a 15th straight month in January. Rate cuts are coming eventually, and geopolitical risk isn’t going away. But after moves this dramatic, expect more chop before things settle down.

The indicators

The QFC S&P Pattern Recognition strategy started the week 190% long, scaled back to 180% long on Monday, and increased back up to 190% long on Friday. Our QFC Political Seasonality Index started the week in its risk-off posture, switching to its risk-on posture on Thursday. (The QFC Political Seasonality Index—with all of the daily signals—is available post-login in our Weekly Performance Report section under the Domestic Tactical Equity category).

The Volatility Adjusted NASDAQ strategy started the week 60% long, decreased exposure to 40% long on Tuesday’s close, moved back to 60% long on Wednesday, and dropped back to 40% long on Friday’s close. The Systematic Advantage strategy was 60% long throughout the week. Our QFC Self-adjusting Trend Following strategy remained 200% long for the week. These strategies can employ leverage, so their exposure may exceed 100% at times.

FPI’s Growth and Inflation measure—one of our Market Regime Indicators—shows that we are in a Normal economic environment, defined by positive monthly changes in both prices and GDP. A Normal environment has occurred 75% of the time since 2003 and has been positive for stocks, bonds, and gold. Stocks have delivered the highest returns in Normal periods, while gold has ranked second but also experienced high drawdowns.

Market Update 2/9/26

Tue, 10 Feb 2026 03:41:00 GMT

Market snapshot

• Stocks: The major U.S. stock market indexes were mixed last week. The NASDAQ Composite lost 1.83%, the S&P 500 fell 0.09%, the Russell 2000 gained 2.18%, and the Dow Jones Industrial Average rose 2.50%.

• Bonds: The 10-year Treasury bond yield fell from 4.26% to 4.22%.

• Gold: Spot gold rose 1.43%, closing above $4,900 an ounce.

• Market indicators and outlook: Market regime indicators show the market is in a Normal economic environment stage, which is historically positive for stocks, bonds, and gold but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility is Low and Rising, which favors stocks over gold and then bonds.

***

For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Stocks

The SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500, finished the week above both its 50-day and 200-day moving averages.

Investors continue to digest fourth-quarter earnings reports. Results have generally met or exceeded expectations, and the broad market has remained near 52-week highs. According to FactSet’s Earnings Insight report, more than half of S&P 500 companies have reported results so far. Among those firms, revenue and earnings-per-share surprises have skewed to the upside. Blended earnings growth currently stands at 13%, a very healthy number. Valuations sit above both the five-year and 10-year averages, reflecting that strength.

Bonds

The iShares 7-10 Year Treasury Bond ETF (IEF), which tracks intermediate-term Treasury bonds, finished last week above both its 50-day and 200-day moving averages. Bond prices remain near their 52-week highs.

Markets reacted to a notable policy development last week. President Trump has nominated Kevin Warsh, a former member of the Federal Reserve Board of Governors, to succeed Federal Reserve Chair Jerome Powell, whose term expires in May. While Warsh brings substantial experience to the role, the nomination appeared to catch some investors off guard. The announcement was followed by a brief spike in market volatility, with gold and silver both posting double-digit losses on the day.

At its January meeting, the Federal Reserve left interest rates unchanged. Two policy meetings remain before Powell’s term ends, with the next scheduled for mid-March. According to CME Group’s FedWatch tool, market expectations currently point to no rate change at that meeting.

Gold

The SPDR Gold Shares ETF (GLD), which tracks the price of gold, finished the week above both its 50-day and 200-day moving averages.

FPI’s indicators

The QFC S&P Pattern Recognition strategy’s primary signal started the week with a 120% net long exposure to the S&P 500. Exposure increased to 170% net long on Monday, dipped to 160% net long on Tuesday, moved back to 170% net long on Thursday, and rose to 190% net long on Friday.

The Volatility Adjusted NASDAQ strategy started the week with a 120% net long exposure to the NASDAQ 100. Exposure decreased to 100% net long on Monday, increased to 120% net long on Wednesday, and fell to 100% net long on Thursday.

The Systematic Advantage strategy held a 60% net long exposure to the S&P 500 throughout the week.

Our QFC Self-adjusting Trend Following strategy’s primary signal began the week 100% net long the NASDAQ 100 and increased to 200% net long on Friday.

Our S&P volatility regime is registering a Low and Rising reading, which favors stocks over gold and then bonds from an annualized return standpoint. The combination has occurred 22% of the time since 2003.

Market Update 2/2/26

Tue, 03 Feb 2026 03:03:00 GMT

Market snapshot

• Equities: U.S. stocks were volatile but mostly range-bound in the final week of January. The S&P 500 briefly crossed 7,000 for the first time, rising 0.35% for the week. The NASDAQ Composite fell 0.16%; the Dow Jones Industrial Average lost 0.42%; and small-caps lagged, with the Russell 2000 down 2.07%.

• Fixed income: Interest rates remained steady last week as investors balanced expectations for 2026 rate cuts against still-sticky inflation. The benchmark 10-year Treasury yield rose to 4.24% from 4.23%.

• Gold and commodities: Gold prices pulled back 1.87% to end the week at $4,894.23 per ounce. Commodities were volatile, with silver experiencing its largest one-day decline since 1980.

• Market indicators and outlook: Our strategies were broadly bullish, with some levered strategies taking profit early in the week before rebuilding exposure. Market regime indicators continue to show a Normal economic environment, which has historically been positive for stocks, bonds, and gold—but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility is Low and Rising, which favors gold over stocks and then bonds.

***

For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Equities

U.S. equities delivered a week defined more by digestion than direction. Early in the week, markets built on January’s strong start, supported by resilient earnings expectations and ongoing enthusiasm around productivity gains tied to artificial intelligence and capital investment. Midweek, the S&P 500 briefly crossed the 7,000 level for the first time, a notable psychological milestone that underscored how far markets have traveled from the volatility of prior years.

As is often the case near new highs, that strength invited a measure of profit taking. By Friday’s close, major indexes softened as investors rebalanced exposures and reassessed risk following a strong January. Technology- and growth-oriented areas saw the most pressure late in the week, while more cyclical and value-oriented segments remained relatively resilient. Bespoke Investment Group noted that the NASDAQ seemed to stall near its October highs, which has proven to be a meaningful resistance level.

From a broader perspective, this type of consolidation should not be surprising. Periods following strong advances often require time for markets to absorb gains and reset before a potential continuation higher.

On the economic front, some data will be delayed or inaccurate due to a partial government shutdown. The Bureau of Labor Statistics announced it is suspending data collection and dissemination until federal funding is restored. Other data releases show the Federal Reserve held the overnight funds rate steady at 3.75%. Unemployment claims were in line with expectations at 209,000 versus a forecast of 206,000. The producer price index was higher than expected on both headline and core measures, rising 0.5% and 0.7% month over month, respectively, compared with expectations of 0.2% for both.

Equity behavior last week appeared consistent with a market that is cautious but not fragile, and optimistic but not complacent. Political uncertainty and data disruptions could create short-term dislocations in markets, but the primary consideration is the improvement in breadth. We’re seeing leadership from sectors beyond Technology, which should help investors feel more confident about market index moves. In January, eight sectors outperformed Technology, and seven outperformed the headline S&P return.

Fixed income

Bond markets reflected this same balancing act. Treasury yields were little changed over the week, with the 10-year Treasury ending at 4.24%. Investors appeared comfortable waiting for additional clarity on inflation and economic growth before making more decisive duration bets. Shorter-maturity yields continued to reflect expectations that policy rates will eventually move lower, but not imminently.

The major news for fixed income investors was President Trump’s nomination of Kevin Warsh to succeed Federal Reserve Chair Jerome Powell. Warsh is a proponent of lowering interest rates, a view President Trump has openly supported. At the same time, Warsh has criticized the size of the Federal Reserve’s balance sheet, calling it “bloated.” In an interview with the Hoover Institution, he said that if the Fed were to “run the printing press a little quieter, we could then have lower interest rates” because excess liquidity has contributed to inflation running above target.

From an allocation standpoint, the current rate environment continues to offer investors opportunities to carefully consider the role fixed income plays in a diversified portfolio. As markets begin to assess how the next Federal Reserve Chairman might approach monetary policy, it would not be surprising to see rates continue their downward trajectory.

Gold and commodities

Gold and broader commodity markets saw a clear shift in tone as the week progressed. Early strength gave way to a sharp pullback into Friday as the U.S. dollar strengthened and investors locked in gains following a strong prior run. The move served as a reminder that even assets often viewed as defensive can experience meaningful short-term volatility, particularly when positioning becomes crowded.

Silver was especially vulnerable following its sharp run-up over the last year. On Friday, silver prices tumbled more than 30%, marking the worst single-day decline since 1980.

Flexible Plan Investments (FPI) is the subadviser to the only U.S. gold mutual fund, the Gold Futures Tracking Fund (QGLDX), formerly The Gold Bullion Strategy Fund. Launched in 2013, the fund is designed to track the daily price changes in the precious metal in a more tax-efficient manner than its ETF counterpart, GLD.

The indicators

Our QFC S&P Pattern Recognition strategy started the week 180% long. Exposure was reduced to 140% long on Tuesday, then cut further to 80% on Wednesday and 70% on Thursday, before increasing to 120% on Friday’s close. Our QFC Political Seasonality Index remained in its risk-on posture throughout the week. (The QFC Political Seasonality Index—with all of the daily signals—is available post-login in our Weekly Performance Report section under the Domestic Tactical Equity category.)

The Volatility Adjusted NASDAQ strategy started the week 120% long, reduced exposure to 100% long on Thursday’s close, and increased back to 120% long to end the week. The Systematic Advantage strategy started the week 120% long, cut exposure to 90% on Tuesday’s close, and reduced further to 40% long on Friday’s close. Our QFC Self-adjusting Trend Following strategy started the week 200% long and remained there until Friday’s close, when exposure was reduced to 100% long. These strategies can employ leverage, so their exposure may exceed 100% at times.

FPI’s Growth and Inflation measure—one of our Market Regime Indicators—shows that we are in a Normal economic environment, defined by positive monthly changes in both prices and GDP. A Normal environment has occurred 75% of the time since 2003 and has been positive for stocks, bonds, and gold. Stocks have delivered the highest rate of return in Normal periods, while gold has ranked second but has also experienced high drawdowns.

Our S&P volatility regime is registering a Low and Rising reading, which favors gold over stocks and then bonds from an annualized return standpoint. The combination has occurred 27% of the time since 2003. It is a stage of relatively low risk across the asset classes.

Market Update 1/26/26

Tue, 27 Jan 2026 03:32:00 GMT

Market snapshot

• Stocks: The major stock indexes all closed slightly lower this past week. The S&P 500 declined 0.35%, the NASDAQ fell 0.06%, and the Russell 2000 lost 0.32%.

• Bonds: Bonds saw mild gains. The U.S. Aggregate Bond ETF (AGG) advanced 0.06%, while the 20-year Treasury Bond ETF (TLT) rose 0.15%.

• Gold: Gold futures closed the week at $4,979.90, up $384.50 per ounce, or 8.37%.

• Market indicators and outlook: Technical indicators are mostly positive for stocks, as are the strategies. Market regime indicators show the market is in a Normal economic environment, which is historically positive for stocks, bonds, and gold—but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility is Low and Falling, which favors stocks over gold and then bonds.

***

For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Stocks

After hitting an all-time high just a week and a half ago, the major equity indexes went into another tariff-induced swoon, only to reverse on the Greenland news. Once again, we are presented with a series of higher highs and lower lows that is characteristic of a rising trend. This mirrors the price action we have seen develop repeatedly over the last three years.

One development that does differ from these past trends is the new ascendency of small-cap stocks. As the previous chart shows, since the beginning of the year, the smaller the capitalization weighting, the better the performance. While smaller-cap stocks tend to do better in December and January, they have underperformed for so long that it may be time for them to sustain this breakout throughout the year.

There seems to be less focus on this Wednesday’s Federal Reserve announcement on short-term interest rates. However, it still carries some potential to be disruptive if the Fed does anything other than hold rates at the current level. It is noteworthy that since mid-December, the Fed’s open-market activity has reversed from its long-standing bearish configuration. Instead, the Fed has been in a quantitative easing (QE) mode, adding liquidity to the system through its open-market activity.

Beyond these Fed actions, President Trump recently announced that he has instructed Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds. This could have an impact similar to QE as the government buys these bonds and provides more liquidity to the system.

Earnings reports for the fourth quarter have begun to roll in, and the bullish trend here is also obvious. With 100 companies reporting so far, 70% have beaten analysts’ expectations for both earnings and revenue.

The economy remains robust, with third-quarter GDP at 4.4% and a strong 5.4% fourth-quarter tracker. Jobless claims (200,000) and consumer sentiment (56.4) both beat forecasts, signaling resilience despite restrictive rates.

Finally, as the chart below shows, the VIX volatility monitor spiked last week during the European tariff scare, topping the 20% bearish threshold I monitor. However, it quickly reversed and is now approaching a reading of 15, which has been a good buy signal.

The bottom line: The recent tariff faint has worked off some of the market’s overbought condition, as has the sideways move in large-cap stocks. The broadening of the rally to include small-cap stocks is positive for future equity gains, as are the more bullish Fed, earnings, and—as discussed below—a shift to positive political seasonality. That said, if the Federal Reserve throws a curveball Wednesday, it could spark some volatility.

Bonds

Yields broke higher last week as uncertainty over the latest tariff news cast doubt on the U.S. dollar. However, like with the stock market, yields calmed by week’s end, returning to the top of the six-week trading range that preceded the breakout. With the Federal Reserve expected to hold rates steady, a few reassuring words from Chairman Jerome Powell or other Fed governors could be enough to push yields back into that range. Of course, if comments are more hawkish, the breakout may prove to be an early indicator of much higher rates to come.

Although yields have moved above and below their shorter-term moving average since September, it was encouraging that the longer-maturity TLT bond ETF was holding above its weekly moving average. That changed last week, when prices appeared to break down amid geopolitical concerns and a declining U.S. dollar. (See the gold discussion below for more on this dynamic.)

Meanwhile, the high-yield bond market continues to move higher with stock prices. Support from stocks and expectations for lower interest rates have been pushing this hybrid bond higher. As we have noted for more than nine months, the trend continues to favor this asset class in the near term.

Gold

While gold was the worst-performing precious metal for the week, it still gained 8.37%. After hitting 50 all-time highs during last year—roughly one out of every five trading days—gold surged to yet another new all-time high, breaking above the $5,000-per-ounce target of so many analysts. Price targets have since moved higher, with Goldman Sachs now pointing to $5,400 and the London Bullion Market Association’s most recent market survey placing potential upside as high as $7,150.

It was almost a perfect scenario, with reports of declining supply and growing demand:

• South Africa’s gold production fell sharply by 6.0% year over year in November, a significant drop from October’s revised 0.3% decline. Bloomberg reports that broader mining output also disappointed, falling 2.7% year over year versus expectations of a 5.0% increase, down from a revised 6.1% gain in October, highlighting downside risks to supply and reinforcing tighter precious metals fundamentals.

• At the same time, gold ETFs saw $5.5 billion in inflows over the past week, largely from North American investors.

The traditional contrarian relationship between gold and the U.S. dollar continued. As the following chart shows, the dollar sold off sharply amid geopolitical tensions tied to tariffs and developments related to Greenland. Even so, it remains above the three-year low reached last September.

Flexible Plan Investments (FPI) is the subadviser to the only U.S. gold mutual fund, The Gold Bullion Strategy Fund (QGLDX). Launched in 2013, the fund is designed to track the daily price changes in the precious metal in a more tax-efficient manner than its ETF counterpart, GLD.

The indicators

The short-term technical indicators of future stock market price changes that I watch are now all positive. Our QFC S&P Pattern Recognition strategy had a 180% exposure to the S&P 500 Index as of Monday’s close.

Our QFC Political Seasonality Index (PSI) strategy had been out of the stock market since its close on January 16, but it returned to a fully invested position at the close on Friday, January 23. It will remain fully invested until February 3. (Our QFC Political Seasonality Index—with all of the daily signals for 2026—is available post-login in our Weekly Performance Report section under the Domestic Tactical Equity category.)

FPI’s intermediate-term tactical equity strategies maintain their positive bias. Classic signal remains long equities. The Volatility Adjusted NASDAQ strategy finished the week at a 120% net long exposure to the NASDAQ 100. Systematic Advantage ended the week 120% net long. Our QFC Self-adjusting Trend Following strategy remains 200% invested. QFC Dynamic Trends also remains 200% invested.

Our S&P volatility regime is registering a Low and Falling reading, which favors stocks over gold and then bonds from an annualized return standpoint. The combination has occurred 32% of the time since 2003 and has been associated with higher drawdowns for gold.

Market Update: Fourth-quarter 2025 recap

Tue, 20 Jan 2026 19:10:00 GMT

Momentum pauses as markets digest a strong year

The fourth quarter of 2025 closed out the year with stocks near record highs. But with much of the year’s gains already in place, volatility reemerged after a relatively calm third quarter. Stocks entered October with substantial year-to-date gains that already reflected the high degree of optimism for new technologies and their potential to drive revenue and profits. As a result, markets spent much of the fourth quarter fluctuating within a narrow range, struggling to push meaningfully higher following the strong gains of the third quarter.

Communication Services and Health Care outpaced the broader market, while Utilities and Real Estate lagged, both delivering negative returns for the quarter. International equities outperformed domestic equities.

While the bond market posted small gains overall for the quarter, longer-dated bonds fell slightly in value. The Federal Reserve delivered two rate cuts, though investors are uncertain about how much additional monetary stimulus might come in 2026.

Gold once again stood out, substantially outperforming both stocks and bonds. Many of our strategies invest in gold and benefited from its strong performance in 2025.

Recognizing the market gains this quarter, most of our actively managed strategies were positioned with large non-defensive holdings at quarter-end. Among our QFC, ETF, and Axos platform strategies:

• 90% of our equity strategies had over 90% in non-defensive asset exposures

• 69% of our bond strategies had over 50% in non-defensive asset exposures

• 95% of our core strategies had over 50% in non-defensive asset exposures

• 100% of our alternative strategies had over 50% in non-defensive asset exposures

As the year drew to a close, markets shifted from steady momentum to a more selective environment—one that rewarded discipline and flexibility. That is why our strategies are designed to adjust as conditions change—maintaining exposure when opportunities are present and emphasizing risk management when momentum pauses. In markets, as in any competitive environment, long-term success depends less on any single quarter and more on executing a disciplined process through changing conditions.

Market Update 1/12/26

Tue, 13 Jan 2026 03:53:00 GMT

Market snapshot

• Stocks: U.S. equities had a strong first full week of 2026, with gains across major indexes and leadership from small-cap stocks. The S&P 500 rose 1.58%, the NASDAQ Composite gained 1.88%, the Dow Jones Industrial Average advanced 2.34%, and the Russell 2000 climbed 4.68%.

• Bonds: Interest rates remained steady as markets considered expectations for potential rate cuts in 2026 against somewhat sticky inflation. The benchmark 10-year Treasury yield fell to near 4.17% from 4.19%.

• Gold and commodities: Gold prices jumped 4.09% to close the week around $4,509.50 per ounce as geopolitical tensions and safe-haven demand supported the rally in the precious metal.

• Market indicators and outlook: Our strategies were broadly bullish last week, with some leveraged strategies using all or most of their available leverage. Market regime indicators continue to show a Normal economic environment, which has historically been positive for stocks, bonds, and gold—but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility remains Low and Falling, a backdrop that has tended to favor stocks over gold and then bonds.

***

For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Stocks

U.S. equities posted gains of more than 1% across major indexes last week, prompting a look at how similar starts to the year have historically played out. According to Bespoke Investment Group, since 1953, when the S&P 500 has finished the first week of the year in positive territory, the average return for the remainder of the year is 13.6%. When the Index has gained more than 1% during the first week, the average return has increased to 14.1%. While history is no guarantee, early-year market strength has often provided a constructive backdrop for the months that follow.

Generally positive economic data supported the market’s advance:

• Institute for Supply Management (ISM) Purchasing Managers’ Indexes: Manufacturing activity remains in contraction, while the services sector continues to expand.

• Employment: Nonfarm payrolls rose by 41,000, below expectations of 49,000 but still indicating job growth. The unemployment rate fell to 4.4% from 4.6%, compared with expectations of 4.5%.

• Wages: Average hourly earnings increased 0.3% month over month, in line with forecasts.

• Consumer sentiment: The University of Michigan’s preliminary consumer sentiment index came in better than expected. The latest reading was the highest since September 2025 and above last year’s lows following the tariff-related market volatility in April.

The most notable headline risk last week involved the Federal Reserve. News broke that the Department of Justice issued a subpoena related to Federal Reserve Chair Jerome Powell’s prior congressional testimony regarding renovation costs for Federal Reserve buildings in Washington, D.C. In a statement posted on the Federal Reserve’s website, Powell disputed the claims, described the action as politically motivated, and emphasized the central bank’s independence in setting monetary policy.

Equity futures were briefly spooked Sunday evening by the news. The full impact of it may take time to unfold and will likely be assessed in the days and weeks ahead.

The key takeaway remains consistent with recent updates: be prudent. Allowing data—not emotion—to guide decision-making remains especially important in an environment where economic data remains mainly positive, though with some political noise thrown into the mix. Scenario analysis and stress testing can help investors better understand how different outcomes may affect their portfolios.

Bonds

Bond markets were calm, with Treasury yields little changed on the week. The 10-year yield fell 2 basis points to 4.17%, staying within the trading range that has largely held since September.

Rates across the curve remained mostly range-bound. Economic data continued to come in mostly positive, but the future of inflation remains somewhat uncertain. Movements in interest rates have been more pronounced at the short end of the yield curve—two years and under—while longer-term yields have shown less volatility. The limited movement in longer-term rates likely reflects continued concerns about inflation remaining higher than desired.

The broader backdrop still includes elevated equity valuations and the potential for increased market volatility, particularly if economic data begins to disappoint. With longer-term interest rates remaining relatively high amid sticky inflation expectations, investors may want to think about their longer-term inflation outlook and whether fixed-income exposure could help offset equity-related risks.

Gold and commodities

Gold prices rose sharply to start the year, adding 4.09% and closing the week at $4,509.50 per ounce. Some of this rally could be attributed to geopolitical tensions, including continued unrest in Iran and recent developments between the U.S. and Venezuela. A weaker U.S. dollar and the prospect of future monetary easing may also be supporting gold’s appeal as a safe-haven investment.

The indicators

Our QFC S&P Pattern Recognition strategy started the week 190% long, scaled back to 180% long on Tuesday, and remained there for the rest of the week. Our QFC Political Seasonality Index began the week in its risk-on posture and remained there until Thursday’s close, when it moved to risk-off. (The QFC Political Seasonality Index—with all of the daily signals—is available post-login in our Weekly Performance Report section under the Domestic Tactical Equity category.)

The Volatility Adjusted NASDAQ strategy started the week 140% long, increased exposure to 200% long on Monday’s close, and remained there for the rest of the week. The Systematic Advantage strategy began the week 60% long, increased to 90% on Tuesday’s close, and reduced exposure back to 60% long on Friday’s close. Our QFC Self-adjusting Trend Following maintained a 200% long position throughout the week. These strategies can employ leverage, so their exposure may exceed 100% at times.

FPI’s Growth and Inflation measure—one of our Market Regime Indicators—shows that we are in a Normal economic environment, defined by positive monthly changes in both prices and GDP. A Normal environment has occurred 75% of the time since 2003 and has been positive for stocks, bonds, and gold. Stocks have delivered the highest rate of return in Normal periods, while gold has ranked second but has also experienced high drawdowns.

Market Update 1/5/26

Tue, 06 Jan 2026 03:14:00 GMT

Market snapshot

• Stocks: The major U.S. stock market indexes were lower last week. The NASDAQ Composite fell 1.50%, the S&P 500 declined 1.01%, the Russell 2000 lost 0.98%, and the Dow Jones Industrial Average decreased by 0.66%.

• Bonds: The 10-year Treasury bond yield fell from 4.14% to 4.19%.

• Gold: Spot gold fell 4.43%.

• Market indicators and outlook: Market regime indicators show the market is in a Normal economic environment, which is historically positive for stocks, bonds, and gold—but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility is Low and Falling, which favors stocks over gold and then bonds.

***

For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Stocks

The SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500, finished the week above both its 50-day and 200-day moving averages.

Stocks remained in a narrow trading range last week, hovering near highs seen over the past year. Activity has been limited since third-quarter results were reported, which largely met or exceeded investor expectations. Investors appear to be waiting for clearer evidence that the adoption of new artificial intelligence technologies is translating into meaningful benefits for companies.

With new quarterly reports scheduled to be released in a few weeks, investors will soon get another look at revenue and earnings growth across the economy.

Bonds

The iShares 7-10 Year Treasury Bond ETF (IEF), which tracks intermediate-term Treasury bonds, finished last week below its 50-day moving average but above its 200-day moving average.

Bonds have mirrored stocks in recent months, trading mostly sideways as investors try to gauge where interest rates may head in 2026. Inflation remains above the Federal Reserve’s target, tariffs are still in place, and unemployment has been creeping higher. Together, these factors complicate the Fed’s next policy decision.

The next Fed meeting is still a few weeks away. CME Group’s FedWatch tool currently suggests that investors expect no rate change at the January meeting. However, new data released before then could still influence the Fed’s decision.

Gold

The SPDR Gold Shares ETF (GLD), which tracks the price of gold, finished the week above both its 50-day and 200-day moving averages.

FPI’s indicators

The QFC S&P Pattern Recognition strategy’s primary signal started the week with a 60% net long exposure to the S&P 500. Exposure was reduced to 20% net long on Monday, rose to 60% net long on Tuesday, increased to 170% net long on Wednesday, and increased again to 190% net long on Friday.

The Volatility Adjusted NASDAQ strategy started the week with a 120% net long exposure to the NASDAQ 100. Exposure increased to 160% net long on Tuesday and declined to 140% net long on Friday.

The Systematic Advantage strategy held a 60% net long exposure to the S&P 500 throughout the week.

Our QFC Self-adjusting Trend Following strategy’s primary signal was 200% net long the NASDAQ 100 throughout the week.

Market Update 12/29/25

Tue, 30 Dec 2025 03:17:00 GMT

Market snapshot

• Stocks: The market continued this year’s “Santa rally.” The S&P 500 rose 1.41%, the NASDAQ Composite gained 1.23%, and the Dow Jones Industrial Average advanced 1.20%. The Russell 2000 small-cap index added 0.21% for the week.

• Bonds: Interest rates remained steady amid a lighter economic calendar and expectations for potential rate cuts in 2026. The 10-year Treasury yield fell from 4.15% to about 4.13%.

• Gold and commodities: Commodities rallied. Gold prices jumped 4.48%, ending the week at $4,533.21 an ounce.

• Market indicators and outlook: Strategy positioning remained broadly bullish, with some exposure reductions reflecting ongoing risk management. Market regime indicators continue to show a Normal economic environment, which has historically been positive for stocks, bonds, and gold—but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility remains Low and Falling, which favors stocks over gold and then bonds.

***

For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Stocks

U.S. equities posted gains during the holiday-shortened week. Trading volumes were light, and price action was subdued as investors stepped to the sidelines after a strong December advance.

Large-cap indexes held near recent highs but lacked momentum, reflecting more consolidation than conviction. Leadership remained narrow, with defensive and quality-oriented names holding up better than higher-beta ones, such as the “Magnificent Seven.” The following chart compares the performance of the Magnificent Seven, represented by MAGS, with quality stocks, represented by QUAL. The higher-beta names faced more pressure going into the weekend.

Economic data was sparse due to the holiday calendar, reinforcing the narrative of a slowing but resilient economy. Inflation trends continue to move in the right direction, while growth remains steady enough to limit recession concerns. Preliminary fourth-quarter GDP estimates released Tuesday came in above expectations at 4.3%, compared with forecasts of 3.3%. Markets are increasingly focused on early 2026 data for confirmation rather than reacting to short-term noise.

The key takeaway is that investors should be prudent, review their portfolios for risks, and look to make adjustments as conditions warrant. Periods like this often highlight the role of active management in navigating changing conditions and helping investors remain focused.

Bonds

Bond markets were calm last week, with Treasury yields little changed. The 10-year yield fell 2 basis points to 4.13%. The absence of major economic releases kept rates range-bound, as investors continue to anchor expectations around gradual Federal Reserve easing in 2026.

Credit markets remained stable, with no signs of stress. The broader bond trend continues to favor carry and income rather than near-term price appreciation.

With equity valuations creeping higher, future volatility looms. And with interest rates still well above the lows of the last decade, it may be worth monitoring that space for opportunities.

Gold and commodities

Gold and silver prices rose last week during what some described as year-end “Christmas chaos.” Heightened volatility and speculation around supply dynamics—particularly involving silver and China—helped drive short-term price gains, with silver leading the move late in the week. Over the longer term, demand for precious metals continues to be supported by geopolitical uncertainty and ongoing diversification by central banks.

The indicators

Our QFC S&P Pattern Recognition strategy started the week at 200% long exposure, reduced to 140% long on Tuesday, scaled back to 90% on Wednesday, and finished the week at 60% long on Friday.

Our QFC Political Seasonality Index started the week in a risk-on posture and remained there throughout the week. (Our QFC Political Seasonality Index—with all of the daily signals—is available post-login in our Weekly Performance Report section under the Domestic Tactical Equity category).

The Volatility Adjusted NASDAQ strategy started the week 140% long and reduced exposure to 120% long during Wednesday’s shortened trading session. The Systematic Advantage strategy started and ended the week 50% long. Our QFC Self-adjusting Trend Following strategy started and ended the week 200% long. These strategies can employ leverage, so their exposure may exceed 100% at times.

Our Classic model remained fully risk-on all week. Most Classic accounts follow a signal that can change exposure within a week, though a few remain on platforms requiring up to a month to adjust to new signals.

FPI’s Growth and Inflation measure, one of our Market Regime Indicators, shows that we are in a Normal economic environment (characterized by falling inflation and growing GDP). Historically, a Normal environment has occurred 75% of the time since 2003 and has been a positive regime state for stocks, bonds, and gold. Stocks have the highest rate of return in Normal periods. Gold has the second-highest return but has also experienced high drawdowns in these environments.

Our S&P volatility regime is registering a Low and Falling reading, which favors stocks over gold and then bonds from an annualized return standpoint. The combination has occurred 32% of the time since 2003. It is a stage where gold has experienced a high level of drawdown.

Market Update 12/22/25

Tue, 23 Dec 2025 03:58:00 GMT

Market snapshot

• Stocks: Stocks were mixed last week. The NASDAQ Composite gained 0.50%, the S&P 500 rose 0.13%, the Dow Jones Industrial Average lost 0.64%, and the Russell 2000 fell 0.83%.

• Bonds: The 10-year Treasury bond yield fell from 4.19% to 4.16%.

• Gold: Spot gold rose 0.91% last week, closing above $4,300 an ounce.

• Market indicators and outlook: Market regime indicators show the market is in a Normal economic environment stage, which is historically positive for stocks, bonds, and gold but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility is Low and Falling, which favors stocks over gold and then bonds.

***

For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Stocks

The SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500, finished the week above both its 50-day and 200-day moving averages and is once again near all-time highs.

As the traditional Santa Claus rally unfolds, stocks have continued to hold steady as the year draws to a close. It has been a strong year for stocks, with gains after April more than offsetting losses from the first four months. Valuations are elevated, reflecting optimism around new technological developments. Still, at these rarefied levels, corrections can easily develop. While short-term indicators remain positive, careful monitoring will be essential as the new year begins.

Bonds

The iShares 7-10 Year Treasury Bond ETF (IEF), which tracks intermediate-term Treasury bonds, finished last week below its 50-day moving average but above its 200-day moving average.

Source: Koyfin

Bonds have traded mostly sideways alongside stocks over the past couple of months, despite the Federal Reserve’s rate cuts. The Fed lowered rates three times in 2025, and more cuts are possible in 2026. However, uncertainty around inflation data has complicated the outlook.

The November consumer price index report, released last Thursday, was significantly affected by the recent government shutdown, raising questions about its reliability. An accurate measure of inflation is vitally important for the Fed as it determines the appropriate path for short-term interest rates.

A review of actual commodity prices does tend to support a softer price environment for most consumer items, as agricultural and oil prices declined during the year. The primary exception, and it is a big one, can be seen in the livestock category. As the following chart shows, though, there was a wide range of price changes across different commodities over the past year.

The Fed’s next meeting is scheduled for the end of January. CME Group’s FedWatch tool currently indicates that investors expect no rate change at the meeting. New data released between now and then could influence the Fed’s decision.

Gold

The SPDR Gold Shares ETF (GLD), which tracks the price of gold, finished the week above both its 50-day and 200-day moving averages. Yesterday, it hit an all-time high, having risen more than 75% this year.

FPI’s indicators

The QFC S&P Pattern Recognition strategy’s primary signal started the week with a 50% net short exposure to the S&P 500. Exposure shifted to 120% net long on Tuesday, increased to 180% net long on Wednesday, and rose to 200% net long on Thursday. The strategy continues to outperform its S&P 500 benchmark by a wide margin.

The Volatility Adjusted NASDAQ strategy started the week with a 200% net long exposure to the NASDAQ 100. Exposure declined slightly to 180% net long on Thursday and fell further to 140% net long on Friday.

The Systematic Advantage strategy started the week with a 90% net long exposure to the S&P 500. Exposure was reduced to 30% net long on Monday and increased to 60% net long on Friday.

Our QFC Self-adjusting Trend Following strategy’s primary signal was 200% net long the NASDAQ 100 throughout the week.

Because the Volatility Adjusted NASDAQ, Systematic Advantage, QFC Self-adjusting Trend Following, and QFC S&P Pattern Recognition strategies can all employ leverage, their investment positions may at times exceed 100%.

FPI’s Growth and Inflation measure, one of our Market Regime Indicators, shows that we are in a Normal economic environment stage (meaning a positive monthly change in both prices and GDP). Historically, a Normal environment has occurred 75% of the time since 2003 and has been a positive regime state for stocks, bonds, and gold. Stocks have the highest rate of return in Normal periods. Gold has the second-highest return but has also experienced high drawdown in these environments.

Our S&P volatility regime is registering a Low and Falling reading, which favors stocks over gold and then bonds from an annualized return standpoint. The combination has occurred 32% of the time since 2003. It is a stage where gold has experienced a high level of drawdown.

Market Update 12/15/25

Tue, 16 Dec 2025 03:15:00 GMT

Market snapshot

• Stocks: Stocks were mixed last week. The NASDAQ Composite lost 1.61%, the S&P 500 fell 0.61%, the Dow Jones Industrial Average gained 1.10%, and the Russell 2000 rose 1.21%.

• Bonds: The 10-year Treasury bond yield rose from 4.14% to 4.19%.

• Gold: Spot gold rose 2.43% last week, closing above $4,200 an ounce.

***

For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Stocks

The SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500, finished the week above both its 50-day and 200-day moving averages.

Stocks have continued to trade sideways after reaching new highs in late October. Investors are standing by as companies race to implement AI tools to achieve productivity gains. Concerns remain that the labor market could be weakening, which could lead to a softer consumer backdrop.

Stock prices are substantially higher than at the beginning of the year, so a pause in valuation expansion could be warranted. With fourth-quarter earnings reports still several weeks away, a period of relatively steady market action could persist. Year-to-date gains remain substantial, especially considering the springtime volatility.

Bonds

The iShares 7-10 Year Treasury Bond ETF (IEF), which tracks intermediate-term Treasury bonds, finished last week below its 50-day moving average but above its 200-day moving average.

Bonds have fallen from recent highs despite the Federal Reserve’s latest rate cut. Last week, the federal funds rate was cut by another 25 basis points, bringing the total reduction to 75 basis points across three separate meetings in 2025, a pace similar to that seen in 2024. Even so, intermediate- and long-term bonds have not risen substantially over the past few months.

Inflation remains above the Fed’s 2% target, and continued tariff policy may be contributing to investor skepticism about the Fed’s ability to maintain very low short-term rates in the future. As a result, bond investors appear cautious despite recent policy easing.

The Fed’s next meeting is scheduled for the end of January. CME Group’s FedWatch tool currently indicates that investors expect no change in rates at the meeting. Fewer cuts going forward could put a damper on bond prices.

Gold

The SPDR Gold Shares ETF (GLD), which tracks the price of gold, finished the week above both its 50-day and 200-day moving averages.

FPI’s indicators

The QFC S&P Pattern Recognition strategy’s primary signal started the week with a 50% net long exposure to the S&P 500. Exposure changed to 20% net long on Wednesday before moving back to 50% net long on Thursday.

Our QFC Political Seasonality Index strategy started the week in a defensive posture and shifted to an aggressive position on Thursday. (Our QFC Political Seasonality Index—with all of the daily signals—is available post-login in our Weekly Performance Report section under the Domestic Tactical Equity category.)

The Volatility Adjusted NASDAQ strategy started the week with a 120% net long exposure to the NASDAQ 100. Exposure increased to 200% net long on Monday, declined to 180% net long on Tuesday, and returned to 200% net long on Wednesday.

The Systematic Advantage strategy started the week with a 60% net long exposure to the S&P 500 and increased to 90% net long on Wednesday.

Our QFC Self-adjusting Trend Following strategy’s primary signal was 200% net long the NASDAQ 100 throughout the week.

Because the Volatility Adjusted NASDAQ, Systematic Advantage, QFC Self-adjusting Trend Following, and the QFC S&P Pattern Recognition strategies can employ leverage, their investment positions may at times exceed 100%.

FPI’s Growth and Inflation measure is one of our Market Regime Indicators. It shows that we are in a Normal economic environment stage (meaning a positive monthly change in prices and a positive monthly change in GDP). Historically, a Normal environment has occurred 60% of the time since 2003 and has been a positive regime state for stocks, bonds, and gold. Gold tends to outpace both stocks and bonds on an annualized return basis in a Normal environment but carries a substantial risk of a downturn in this stage.

Market Update 12/8/25

Tue, 09 Dec 2025 03:19:00 GMT

Market snapshot

• Stocks: The major stock indexes saw moderate gains this past week. The SPX rose 0.3%, the NASDAQ climbed 0.9%, and the Russell 2000 gained 0.8%.

• Bonds: Bonds struggled. The U.S. Aggregate Bond ETF (AGG) fell 0.5%, and the 20-year Treasury Bond ETF (TLT) tumbled 1.9%.

• Gold: Gold futures closed essentially flat, despite fluctuations during the week.

• Market indicators and outlook: Technical indicators are mostly positive for stocks, as are the strategies. The economic environment is classified as Normal, favoring gold and stocks from a return perspective. Volatility is High and Falling, a regime also historically favorable for gold over other asset classes.

***

For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Stocks

Stocks finished the week near all-time highs. Most equity indexes broke out above their recent government-shutdown-induced declining trend lines, mirroring the S&P 500’s breakout.

Our friends at Bespoke Investment Group summed up the current economic environment well Friday evening:

From an economic perspective, inflation pressures are easing, the labor market is slowing but hanging in there, and several economically sensitive equity baskets that we track have been breaking out to new highs. If the underlying economy was on the verge of falling apart, we wouldn’t expect to see these sectors outperforming. Along with that, the three-headed monster of crude oil, the 10-year yield, and the US Dollar Index is laying out the red carpet for the bulls, and the cherry on top is that the Fed is cutting rates with stocks right near 52-week highs.

While there is a great deal of focus on the Federal Reserve’s Wednesday announcement on short-term interest rates, we continue to note that the Fed’s open-market activity continues to drain liquidity from the system. This actually puts upward pressure on interest rates, which can counteract the Fed’s public policy announcements.

In addition, the attention on short-term rates may be misplaced. The longer-duration bond market remains in a bear market.

And most long-term foreign sovereign bonds continue to fall as the interest rates of their issuing countries rise, despite the Fed’s short-term action.

This dynamic can dampen equity prices because higher long-term rates slow economic activity. A refocus on this fact of life in the hours after the Fed’s announcement may cause a “sell the news” event, even if the Fed gives investors what they say they want.

The bottom line: Stocks continue to signal higher prices by year-end. But if the Federal Reserve throws a curveball Wednesday, the weaker-than-average short-term seasonality this week (see the PSI report in the final section of this update) could spark some volatility before the still-expected year-end rally.

Bonds

Yields on the 10-year Treasury bond have returned to the level they have twice topped out at in the last month and a half. While the downward trend in yields has continued at the macro level, yields have been in a consolidation period since mid-September. This reflects the on-again, off-again conversation among the governors about future Federal Reserve moves.

Treasury Secretary Scott Bessent was correct when he said this week, “I think it’s time for the Fed to just move back into the background like it used to do, calm things down, and work for the American people, set monetary policy on a good path. … This isn’t sport, it’s people’s lives.”

While you will probably know how this resolves by the time you read this, as the Federal Reserve meets Wednesday to decide, the current betting is that the Fed will lower rates another 25 basis points.

Although yields have been bouncing above and below their shorter-term moving average since September, it is encouraging that the longer-maturity TLT bond ETF has recently held solidly above its weekly moving average. Their decline has been relatively minor since yields last bottomed, too. This bottoming-type activity could mean the bond market is getting ready to reverse direction.

Meanwhile, the high-yield bond market continues to move higher with stock prices. Tailwinds from both stocks and hopes for lower interest rates have been pushing this hybrid bond higher. The trend favors this asset class through year’s end.

Gold

Gold remains below its all-time high set in mid-October but has been trending higher since hitting a short-term low near the beginning of November. Encouraging news continues to emerge on the supply side of the supply-and-demand equation. Gold holdings in exchange-traded funds (ETFs) hit 3,932 tons at November’s end, marking six months of growth. This reflects continued investor interest, with gold set for its strongest year since 1979 as investors shift from bonds and currencies to alternative assets.

Despite this movement, Bank of America reported that gold’s rally over the last year has shown a lower correlation with other asset classes than it did throughout the entire post-COVID period. Its connection to Treasurys has also decreased.

Bank of America also noted that, although commodities typically gain when the dollar weakens, this trend has diminished this year. You can see this in the short term on our two charts so far this month, as gold is down slightly along with the dollar.

The indicators

The short-term technical indicators of future stock market price changes that I watch are now positive. Our QFC S&P Pattern Recognition strategy had a 50% exposure to the S&P 500 Index as of Monday’s close.

Our QFC Political Seasonality Index (PSI) strategy has been out of the stock market since its close on December 5. It returns to a fully invested position at the close on December 11. (Our QFC Political Seasonality Index—with all of the daily signals—is available post-login in our Weekly Performance Report section under the Domestic Tactical Equity category.)

FPI’s intermediate-term tactical equity strategies maintain their positive bias. Classic continues 100% long equities. The Volatility Adjusted NASDAQ strategy finished the week at a 200% net long exposure to the NASDAQ 100. Systematic Advantage ended the week 60% net long. Our QFC Self-Adjusting Trend Following strategy remains 200% invested. QFC Dynamic Trends also remains 200% invested.

Because the QFC Dynamic Trends, Volatility Adjusted NASDAQ, Systematic Advantage, QFC Self-Adjusting Trend Following, and QFC S&P Pattern Recognition strategies can employ leverage, the investment positions may exceed 100%.

FPI’s Growth and Inflation measure, one of our Market Regime Indicators, shows that markets are in a Normal economic environment stage (inflation and GDP are growing). Historically, a Normal environment has occurred 60% of the time since 2003. In a Normal climate, gold has outperformed stocks and bonds on an annualized return basis, but it also carries the most downside risk. From a risk-adjusted perspective, Normal is one of the best stages for bonds, followed by gold and then stocks.

Our S&P volatility regime is registering a High and Falling reading. This environment favors gold over bonds and then stocks from an annualized return standpoint. Stocks still tend to produce positive returns, but they have the lowest returns and the highest drawdown risk among the three asset classes. The High and Falling combination has occurred 13% of the time since 2003.

Market Update 12/1/25

Tue, 02 Dec 2025 03:46:00 GMT