Valens Market Phase Cycle Monitor – July 2022 – Jesse Livermore Would Be Long This Market

July 21, 2022

  • Rising Cost to Borrow Isn’t Preventing Growth – Only Excessively High-Cost Will. Credit levels are at or slightly above peaks from the most recent bull market cycle. However, they haven’t reached levels that signal risk of markets closing. Healthy corporate and consumer borrowing growth and balance sheets point to no risk of a real recession in the foreseeable future.
  • Concerns about inflation and growth have created significant near-term volatility in the stock market, presenting an opportunity for investors.
  • U.S. corporates are remarkably profitable, and growth is starting to accelerate. U.S. corporate investment has finally been showing signs of growth. Ruddy profitability can help power that growth and the market higher as it accelerates.
  • Monthly inflections:
    • Credit (55% of macro outlook): Neutral (no change)
    • Earnings Growth (30%): Bullish (no change)
    • Momentum/Sentiment (10%): Positive (no change)
    • Valuations (5%): Positive (positive change)
  • Timetable Recommendation: 50/50 Split for 5-10 Year Money and 10 Month Dollar Cost Averaging.

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