text: The Asbury Indicator Matrix™ (AIM) is a dynamic, non-traditional approach to analyzing traditional economic data and asset prices. Through the close monitoring and evaluation of technical, quantitative and behavioral factors, Asbury Research determines the market’s assessment of current economic conditions and fundamental data, because the market’s opinion is the only one that matters. The end result is that our conclusions tend to be more intuitive and forward-looking than the typical Wall Street approach and, as a result, we tend to stay ahead of the market. We believe that the market itself is a clearinghouse for the collective wisdom of all its participants, and thus is the best evaluator of all economic and geopolitical data. This dynamic evaluation process appears every day in the pricing of financial assets by investors. Asbury Research’s analytical process determines the market’s opinion of, and reaction to, the latest economic data. John Kosar, Director of Research, provides more than 25 years of insight and experience in covering the global financial markets. Kosar spent the first half of his career on the trading floors of the Chicago financial exchanges, where he had the opportunity to learn how the US financial markets work from the inside out. This…
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  Asbury in the Media
  Forbes
  September 23rd, 2017
  A Sneak Peek At Next Week: Watch ‘Fast Horse’ Semiconductors
  John Kosar , Contributor
  I have 37 years of experience forecasting global financial markets. Opinions expressed by Forbes Contributors are their own.
  (Photo by Vince Caligiuri/Getty Images)
  In my September 7th article for Forbes, I said “Semiconductor stocks, which tend to lead the U.S. stock market both higher and lower, have recently made an abrupt and unexpected upward reversal which, if it holds, is likely to lead the broad market to new all time highs by year end.” The PHLX Semiconductor (SOX) Index turned on a dime the very next day and has since risen by 6%. Meanwhile, the broad market has already risen to new all time highs as of last week, way ahead of my initial expectations. The best news of all is that the SOX potentially still has another 6% to go before it reaches my upside target.
  I pay special attention to semiconductors because they, along with other high flyers like biotech, tend to lead the U.S. stock market both higher and lower. This tendency to lead is because these higher beta areas of the market are the ‘fast horses’ that aggressive investors jump on during a risk-on environment, to try to catch some relative outperformance versus the broad market S&P 500, and are the first ones they jump off of when the environment changes to risk-off.
  The green highlights in Chart 1 below, an updated version of one from my September 7th article, identify the August 31st breakout in the PHLX Semiconductor (SOX) Index as well as the 1214 upside target it implies. The red highlights show that the SOX spent last week negotiating overhead resistance at 1150, which is the index’s June 9th benchmark high.
  Copyright 2017 Asbury Research LLC
  Chart 1
  A sustained rise above 1150 resistance this week would clear the way for another 6% rise to reach my target.
  The lower panel of the next chart, another updated version from my previous article, plots the daily total net assets invested in the iShares PHLX Semiconductor ETF (SOXX), which tracks the SOX. I spend a great deal of time tracking ETF asset flows because they are one of the few indicators I have come across in my career that actually lead price. The September 7th version of this chart showed that these assets were testing the $1.13 billion threshold for the third time since mid June, which I identified as an important decision point.
  Copyright 2017 Asbury Research LLC
  Chart 2
  This updated version shows that these investor assets have since passed this hurdle with flying colors, aggressively expanding by an additional 8% or $116.6 million, to new historic highs. This expansion of assets is important because it shows us that the recent strength in the SOX Index was based on real investors dollars buying the index and holding it overnight, indicating bullish conviction rather than just intraday speculation. In simple terms, aggressively expanding investor asset confirm the validity of the recent move higher. Moreover, as long as these assets continue to expand, the SOX will eventually reach my 1214 target.
  Finally, and perhaps most important, is the statistical correlation between the SOX Index and the broad market S&P 500. Table 1 below shows that the SOX and the S&P 500 have maintained a stable and nearly lockstep positive correlation to one another at various intervals over the past 20 years, most recently 0.94 over the past month.
  Copyright 2017 Asbury Research LLC
  Table 1
  This simply means that we can now make some directional assumptions on overall stock market direction based on our expectations for the SOX Index. The only caveat is that, since the SOX tends to outperform during market advances, the S&P 500 is probably going to move up a little less.
  John Kosar, CMT, is Chief Market Strategist at Asbury Research LLC, a provider of technical and quantitative financial market research to institutional money managers and high-net worth investors.
  Asbury in the Media
  John Kosar, Chief Market Strategist, shares his market insight as a frequent contributor on financial television and in the financial press. Take a look at some of John’s televised appearances and media quotes below.
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