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<p>In this week’s leading macroeconomic data, the LEI (Leading Economic Index) from the Conference Board triggered a recessionary warning flag by crossing under its 18-month moving average. This signal has preceded nearly every recession since 1960 and is further corroborated by the LEI’s smoothed 6-month moving average now falling into negative territory.</p>
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<p>The housing data revealed more gloom ahead, as NAHB Traffic of Prospective Buyers, housing starts, and existing home sales all plunged in this week’s releases. With demand clearly weakening, it was also reported that housing prices declined on a seasonally-adjusted basis for the second straight month.</p>
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<p>On the technical front, equities have again started to exhibit weakness following the most overbought extreme in our short-term Pressure Factor (+81) in over two years. On a longer-term basis, the notable lack of bullish confirmation signals from key indicators (including our Negative Leadership Composite) is a major reason to view this rally with a healthy dose of skepticism. For more detailed information, see this month’s issue of <em>InvesTech Research </em>(available later today on our website). <em>&nbsp;</em></p>
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<p>There are no changes to the Model Fund Portfolio, which continues to be defensively positioned with a 44% net invested allocation.</p>
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