Guerite developed the proprietary Guerite Indicator to signal and differentiate between periods of normal-risk and high-risk market conditions. 

High-Risk Market Conditions

High-risk market conditions are identified as periods of market and economic weakness that, historically, have resulted in a heightened risk of market declines.  The Guerite Indicator does not predict declines in the market.  The Guerite Indicator simply signals economic and market conditions, which, on average, have historically produced unsatisfactory investment results for buy and hold investors.

The Guerite Indicator

The Guerite Indicator is a composite of twelve economic and market indicators, monitored weekly.  Each indicator, individually, may not signal economic weakness or high-risk market conditions, but when taken as a whole, the composite indicator model has reliably signaled high-risk market conditions.

The Guerite Indicator is a strategic – not a trading – tool.  Its signals are long-term in nature and the composite of indicators is designed to only signal long-term stock market and economic trends.  Due to its long-term focus, the Guerite Indicator changes signals infrequently.  Since 1960, the Guerite Indicator has changed signals only 14 times, or roughly every three years.

The Guerite Indicator  S&P 500 Index – Logarithmic Scale (1960 – 2005)