Market Update 10.31.10

Below is a ranking of what BFIA believe to be the top markets and asset classes. I can be seen that ex-China Asia countries such as Malaysia and India are on top of the list. In addition, US investment grade and high yield fixed income are still strong asset classes. The US and Europe are towards the bottom of the list.

Regarding our agent-based behavioral measure it is not at .913. It has only slightly increased since last week. Once it hits around .94 we then believe we may hit a point where there is major breakout of major decline. Stay tuned until we see it hit 0.91.


1 malaysia
2 chile
3 India
4 Korea
5 USIIG
6 USHI
7 turkey
8 thailand
9 israel
10 canada
11 Taiwan
12 brazil
13 south_africa
14 mexico
15 China
16 Gold
17 Europe
18 Real_estate
19 Russia
20 EE
21 oil
22 Japan
23 us
24 EMFI

BFIA Market Update 10.24.10

The BFIA behavioral models are signaling to continue over weighting India as well as other Asian market including Thailand, Indonesia, and Malaysia.

Our agent-based-behavioral measure for the US is now at 0.91. If we are to compare this time period to the time period right before the flash crash, we are two weeks before a major downside movement. Therefore, we predict another week or two of low volatility.

Market Update 10.17.10

We now run our BFIA measures for additional markets including Thailand, Indonesia, Chile, and Canada. Based on our long-term behavioral measures, below are the top ten markets we like with number one being the most bullish market.

1 India
2 chile
3 thailand
4 turkey
5 canada
6 south africa
7 brazil
8 Korea
9 Malaysia
10 Eastern Europe

The next top ten list are the markets we like on a short-term basis.

1 turkey
2 Eastern Europe
3 brazil
4 India
5 canada
6 thai
7 China
8 south africa
9 Korea
10 Malaysia

Looking at our agent-based behavioral measure. If we compare the current stock market environment to back in March to May 2010 we would be in the second week of April. This means we may see very low volume for the next three weeks than major downside volatility. It is important to analyze the measures every week to understand the major changes.

Market Update 10.10.10

Last week we mentioned the market was going to continue up, overweight Turkey and South Africa. Summary of the week was the market went up and Turkey went up 7.96% for the week and South Africa was up 2.5% for the week.

Current model results indicate that India is still the largest exposure with Malaysia, South Africa, Turkey, and South Korea the next largest exposures. Based on our agent-based behavioral measure the US is still undervalued by 11%. We still see some more upside before year end. However, we are getting close to the point where we might see a decent pullback. We will keep you updated.

Market Update 10.03.2010

Based on our behavioral measures for the past year, we have been a bull on India. Since investing in India we are up over 40%, which is our best performing ETF. For the first time in months our behavioral measures have signaled to reduce the allocation to India slightly, 1.5%. The markets we should re-allocate to are Turkey and South Africa which are our second and third largest exposures at the moment. We are still bullish on high yield bonds, but we are running the models every week to determine the right time to sell. Our allocation to the US is still under 5%, our lowest exposure.

At the beginning of last week we said this week will help determine the direction of the markets for the next several weeks. Based on the week we believe the markets are going to continue going higher. Currently, our agent-based-behavioral measure for the US is 0.88. The last time it went as high as 0.88 was back in the beginning of March 2010. From that point it went up to 0.94 right before the flash crash. If the dynamics repeat themselves we see the markets going higher and then a slight correction.