Valens Market Phase Cycle Monitor – February 2023 – A Highly Correlated Market Is One Driven By Fear, Not Opportunity

February 16, 2023

  • A Highly Correlated Market Is One Driven By Fear, Not Opportunity. The market has had an impressive rally to start the year. However, underlying technical indicators point to it growing extended, with limited structural investor support.
  • Uniform earnings growth deceleration and continued credit headwinds that will meter growth signal means the market structure is unlikely to change favorably. Near-term corporate management demand for investment has buoyed growth. However, credit and investment metrics signal that on the margin, this is slowing, thanks to the Fed’s efforts.
  • Any credit issues do not need to lead to a deep recession, thanks to healthy borrowers. Healthy corporate and consumer balance sheets limit the risk that ongoing tightening leads to a credit rout and waves of defaults.
  • Monthly inflections:
    • Credit (55% of macro outlook): Negative (no change)
    • Earnings Growth (30%): Neutral (no change)
    • Momentum/Sentiment (10%): Negative (downgrade)
    • Valuations (5%): Negative (downgrade)
  • Timetable Recommendation: 50/50 Split for 5-10 Year Money and 22 Month Dollar Cost Averaging.

You don’t have access to the Valens Research Premium Application.

To get access to our best content including the highly regarded Conviction Long List and Market Phase Cycle macro newsletter, please contact our Client Relations Team at 630-841-0683 or email

Please fill out the fields below so that our client relations team can contact you

Or contact our Client Relationship Team at 630-841-0683