S&P 500 Daily Perspective for Fri 21 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 remains neutral to bearish, but perhaps more importantly, its components are currently in disagreement. This suggests directional uncertainty within the market making rangebound action the most likely outcome for now.

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 14 Feb 2025): the long-term outlook has deteriorated further to bearish. There is persistent weakness over the long-term timeframe even if prices don’t reflect it. 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 20 Feb 2025): the short-term outlook remains bullish, but had an overall weak day. 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 20 Feb 2025): breadth remains neutral, however this is not so important unless the rest of the model is in agreement.

Volatility Outlook (as of 20 Feb 2025): the volatility outlook remains calm. If/when a meaningful sell-off starts, volatility is likely to pick up rapidly. 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 recently shifted its residual position from short to 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.