Yen/USD and Nikkei 225

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If the Yen/USD keeps strengthening, the odds of Japanese stocks rising appear slim.

VIX and High Yield Spreads

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Over the last five years, the CBOE Volatility Index (VIX) has had an 87% correlation with high yield spreads. If the VIX keeps rising, high yield spreads are likely to widen.

MSCI Cyclical and Counter-Cyclical Baskets

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We divide the MSCI World index into cyclical (including materials, industrials, technology and consumer discretionary, financials and energy) and counter-cyclical baskets (including consumer staples, health care, telecom, utilities). The relative performance of cyclicals vs. counter-cyclicals generally improves when the economic news is improving and contracts when it is deterioratinig.

SP500 Futures Down & VIX Rising

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S&P 500 futures fall to 10 day lows this morning. The VIX is close to breaking out above 20.

Disclosures

The information presented here is for informational purposes only, and is not to be construed as an offer to sell, or the solicitation of an offer to buy, securities. Some investments are not suitable for all investors, and there can be no assurance that any investment strategy will be successful. Hyperlinks may be included in this message that provide direct access to other internet resources, including web sites. While we believe these links are to reliable sources, Knowledge Leaders Capital has no control over the accuracy or content of information contained on these sites. Although we make every effort to ensure such links are accurate, up to date and relevant, we have no control over pages maintained by external providers. The views expressed by these external providers on their own web pages or on external sites they link to are not necessarily those of Knowledge Leaders Capital.

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An investor cannot invest directly in an index. Any reference to Index performance does not represent the performance of any investment product offered by Knowledge Leaders Capital, LLC. The performance of client account may vary from the Index performance. Index returns shown are not reflective of actual investor performance nor do they reflect fees and expenses applicable to investing. The Index data is the property of Knowledge Leaders Capital, LLC, which has contracted with SolactiveAG to calculate and maintain the indexes.

The launch date of the Knowledge Leaders Knowledge Leaders Developed World Index (Bloomberg ticker KNLGX is 7/1/14 and the base date of the index calculation is 3/31/2000. The launch date of the Knowledge Leaders Emerging Markets Index (Bloomberg ticker KNLGEX) is 9/2/14 and the base date of the index calculation is 4/1/2005. The launch date of the Knowledge Leaders International Index (Bloomberg ticker KNLGINX) is 8/15/16 and the base date of the index calculation is 3/31/2000. The launch date of the Knowledge Leaders United States Index (Bloomberg ticker KNLGUSX) is 8/15/16 and the base date of the index calculation is 3/31/2000. The launch date of the Knowledge Leaders Developed World ADR Index (Bloomberg ticker KNLGAX) is 9/13/16 and the base date of the index calculation is 3/31/2000. The launch date of the Knowledge Leaders International ADR Index (Bloomberg ticker KNLGINAX) is 8/30/16 and the base date of the index calculation is 3/31/2000.

The returns of the Index prior to the launch date are based on applying the rules in effect as of the launch date retroactively to historical periods to and including the base date. Results are not based on an Index that was maintained in real time. The pre-inception performance results of the Index are hypothetical returns which have been compiled by Knowledge Leaders Capital. The performance results are based upon a hypothetical model. Hypothetical performance results may have inherent limitations, some of which are described below. No representation is being made that any account did or was likely to achieve profits or losses similar to those shown. One of the limitations of hypothetical performance results is that they are prepared with the benefit of hindsight. There are numerous other factors related to the markets in general or to the implementation of any specific trading strategy which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. These returns should not be considered as indicative of the skills of the investment adviser.To obtain additional index methodology and constituent components, please visit KnowledgeLeadersCapital.com.

Companies are selected for “Spotlights” based on high levels of innovation activities in their industries and illustrate innovation being employed across all sectors and geographies. Spotlight selection is separate from stock selection by the investment team. Spotlights are not necessarily representative of investment opportunities and can be selected regardless of investment performance.