S&P 500 Daily Perspective for Tue 25 Feb 2025
GDR Model Performance
Please see the Performance page for more detailed performance numbers, how they’re calculated, and a chart.
For the fine print (a.k.a. the lawyer-approved stuff), don’t miss the Disclaimers section—it’s where all the “officially important” bits live!
GDR Model Outlook
The GDR Model is mostly bearish as all of the model’s components are starting to point towards a more serious sell-off to come...
Fundamentals Outlook (as of 31 Jan 2025): the valuation portion of the model has stocks as being richly valued (i.e. overpriced) for about 6 months now. Note that this is just a barometer to help guide longer-term decision-making rather than short-term market timing.
Long-Term Outlook (as of 21 Feb 2025): the long-term outlook remains bearish and steadily worsening. There is persistent weakness over the long-term timeframe even if prices don’t reflect its extent. When this has happened in previous times, it has taken stock prices several weeks (if not a couple of months) to catch up and begin a meaningful sell-off.
Short-Term Outlook (as of 24 Feb 2025): the short-term outlook closed weak again and has worsened to neutral. If there is a meaningful longer-term sell-off coming, the short-term outlook will inevitably weaken, even if with a delay.
Breadth Outlook (as of 24 Feb 2025): breadth closed bearish. The model’s components seem to be lining up with an overall bearish outlook…
Volatility Outlook (as of 24 Feb 2025): the volatility outlook worsened to stable. If/when a meaningful sell-off starts, volatility is likely to pick up rapidly, and the outlook will drop to at least shaky, if not volatile. On the other hand, as long as this part of the model remains calm or stable, a protracted liquidation remains unlikely.
GDR Model Position
The GDR Model remains effectively flat, although it has just shifted its residual position back to short from long. Changes in residual positions are generally not very important. What matters at this point is that if the overall outlook continues to deteriorate, the model will be likely to open a meaningful short position.
