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Bartometer

May 17, 2022

Hello Everyone,

On my last Bartometer the S&P 500 was around 4580 and I stated the market was again overbought and to Sell some equities and bonds. I stated I saw the S&P retreating to the 4200 level and if that broke then the 3800-3850 level would be the next support. Last Thursday the S&P declined to the 3840 level and bounced to the 4000 area in one day. Even though the markets are now VERY OVERSOLD and can rally a bit more, there is no major upside driver to now start a new Bull Market. Even though the market retreated so much this year, with the NASDAQ down 30% off its highs, the markets are now very oversold, but I only see minor rallies from here and more volatility until inflation and interest rates peak.

We still have the same concerns:

  1. High Inflation.
  2. Potentially Higher interest rates over the next few months.
  3. Potential recession in 2023.
  4. Potentially Slowing earnings growth.
  5. Putins war in the Ukraine and more.

In my opinion, any rally into the 4200 to 4400 area is still a place to consider reducing exposure to equities and bonds depending on your individual circumstances. This however is one of the worst 4.5 months we have had in a long time. As reported by Morningstar, the stock markets down anywhere from 11-50% and bonds down from 5 to 22%. Most investors are seeing their investments go down.

The only major sector that has done well recently is energy sector. Other than that, everything else is falling. Does that mean to stop investing? No, as a matter of fact, I believe the opportunities in the stock and bond markets are going to give many of you opportunities that you have not seen in a while. Dollar cost averaging can be a beneficial way to enter the markets. Consider increasing purchases over the next 1 year as the markets are lower. Warren Buffets frequently states “buy when there is blood in the streets.” There is blood in the streets now for many stocks and its possible it may get worse. Nothing is guaranteed, but if you believe in capitalism
and that great companies and markets do well over time this may become a buying opportunity. When markets are down like this you may want to take advantage of these drops. Look on page 4 to see the last 52 year of the S&P 500.

Some of the INDEXES of the markets both equities and interest rates are below. The source is Morningstar.com up until May 14, 2022 These are passive indexes.

Excerpts from Dr. Robert Genetski

Market Outlook
.
A Look Back

The bloodbath on Wall Street has taken the Nasdaq and other indexes down almost 30% from their highs.

Among the better relative performers, the S&P500 is down 18% and the Dow 14%.

Economic news is mixed. April business surveys show a sharp decline in output in China and Russia. Much of the rest of the world, including the US, continues to grow at a moderate pace amid rapid inflation.

The stock market’s technical signals remain very negative. My technical guru, Joe Bartosiewicz, CFP, wrote about major support for the S&P 500 at about 3800-3850. The index fell to a low of 3840 yesterday before rebounding to 3930. While this could be the bottom, no one can say for certain if it is.

On a positive note, the IBD ratio of bulls to bears is just about where it was in late March, 2020, during the worst fears of the Covid outbreak. Amid such extreme pessimism markets often change direction. Stocks often reflect the collective wisdom of all investors. If so, they are pointing to a much weaker economy than our forecast suggests. The key unknown is how badly shortages of food, diesel fuel and other raw materials will slow both the economy and spending. If the economy stalls or dips into a downturn, there will be some relief from inflation, but at a serious cost in jobs.

With China, Russia and Ukraine creating SupplySide problems, our forecast is for the economy to weaken this summer without going into a downturn. By the end of the summer, the economy will either be soft with continued high inflation or will be flat to down with some relief on prices. Neither scenario is very attractive. Amid all the uncertainty, my stock portfolio remains 50% in stocks and 50% in cash.

A Look Back This week’s April inflation reports showed no relief from soaring inflation. April’s total cpi index slowed to a 4% annual rate while the monthly cpi ex-food and energy increased a 7% annual rate.

Economic Fundamentals Weakening

Stock Valuation Over-Valued 19%

Monetary Policy: Expansive

Recommended Stock Exposure: 50%
This is a reduction of his stock allocation.

Dr Robert Genetski, American Strategic Advisors and LPL Financial are not affiliated. The opinions expressed in this material do necessarily reflect the views of LPL Financial.

S & P 500

Charts Source: AIQSystems.com

Above is the WEEKLY Chart of the S&P 500. This chart goes over the last 1.5
years in the S&P. As you can see the S&P is down about 20% off its high and down 15.2% in 2022. As you can see, I said that the 4200 level was support and if it broke that support then The 3580 to 3850 should find some buying
support. That did happen bottoming at 3840 on Thursday and closed up 2.29% on Friday, Closing at 4023.89. It has substantial Selling resistance from here to the 4200 first then 4400 area next where it can top out again. I am not thinking the S&P can start a new Bull market anytime soon. I do believe the stock market should bottom over the next year so that is why we can consider buying more equities through dollar cost averaging monthly over the next year.

SK-SD stochastics is next. This indicator was the reason I got negative last
month right near the top. This today is the weekly chart, last month was the daily chart. But last week the SK-SD Stochastics was showing an 82 reading meaning it was over bought again. Now, however it is at 16 on the Daily graph and below 32 on the weekly graph. Meaning? The markets are very
OVERSOLD and can potentially have a Rally at anytime.

Next is the MACD or Momentum graph. This shows that the momentum is engrained in a strong down trend for a while. A trend change to the upside would happen if the pink line crosses over the purple line. But as of this moment, I see volatility and a rally or two.

The last indicator is the RSI Wilder index. This is very interesting as if it breaks below the 32 line like it ALMOST IS, then the market is getting extremely oversold and we could have a major rally. It’s almost there
now.

52 YEARS OF PERFORMANCE OF THE S&P 500:

The Stock Market and INFLATION

As you can above, the S&P 500 has performed well over the long term. It has averaged an INFLATION ADJUSTED RETURN OF 6.49% according to Officialdata.org for the last 52 years. It averaged 10.66% before inflation and 6.49% after inflation. So as you can see the stock market has been one of the best ways to offset inflation over the long term. Yes, the market goes down, but over the long term it’s still one of the best places to make money.

SUPPORT AND RESISTANCE LEVELS ON THE S&P 500

SUPPORT 3800 to 3850, then 3719, 3478, and 3380. These are areas not exact numbers
RESISTANCE 4071, 4210, 4322, and 4434

Bottom Line

The market has had one of the worst 4.5 months n a few years dropping 11-50% The cause?? Overvaluation, Higher Interest rates, INFLATION, Covid and the Russian War.. If interest rates are rising and could rise 3 to 5 times like the Federal Reserve says that is why we should consider reducing regular bonds for at least another few months. At that time if interest rates peak because inflation is peaking then regular bonds may be a good investment but the only bonds I might consider are FLOATING RATE BONDS now. In addition, if interest rates rise financials potentially tend to perform better than most. In addition, stocks with pricing power and with good consistent earnings can do better than aggressive companies that have potential but no earnings. Commodities tend to do well in an inflationary environment. Look for companies with revenue growth that has the potential of beating inflation. I am still long term bullish on equities, but the short term could get very volatile where we could go a little higher on the markets but maybe back to 4500, but the downside could be the 3650 level and if we go into a soft recession then the 3300 3500 level is possible and lower if the recession is steeper. This is predicated on the actions of the Federal Reserve. I will continue to do my analysis and inform you when a bottom looks imminent.

The Best to all of you,

Joe Bartosiewicz, CFP®
Investment Advisor Representative
Contact information:

Partner Wealth Manager
American Strategic Advisors
263 Tresser Blvd Ste 100
Stamford CT 06901
860-940-7020

Disclaimer: The views expressed are not necessarily the view of LPL Financial or American Strategic Advisors, Inc. and should not be interpreted directly or indirectly as an offer to buy or sell any securities mentioned herein. Past performance cannot guarantee future results. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Please note that individual situations can vary. Therefore, the information presented in this letter should only be relied upon when coordinated with individual professional advice. *There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio in any given market environment. No investment strategy, such as asset allocation, can guarantee a profit or protect against loss in periods of declining values.

It is our goal to help investors by identifying changing market conditions. However, investors should be aware that no investment advisor can accurately predict all of the changes that may occur in the market.

The price of commodities is subject to substantial price fluctuations of short periods of time and may be affected by unpredictable international monetary and political policies. The market for commodities is widely unregulated and concentrated investing may lead to Sector investing may involve a greater degree of risk than investments with broader diversification.

Indexes cannot be invested in directly, are unmanaged and do not incur management fees, costs, and expenses.

Dow Jones Industrial Average: A price weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ.
S&P 500: The S&P 500 is an unmanaged indexed comprised of 500 widely held securities considered to be representative of the stock market in general.

NASDAQ: the NASDAQ Composite Index is an unmanaged, market weighted index of all over the counter common stocks traded on the National Association of Securities Dealers Automated Quotation System

(IWM) I Shares Russell 2000 ETF: Which tracks the Russell 2000 index: which measures the performance of the small capitalization sector of the U.S. equity market.

The Merrill Lynch High Yield Master Index: A broad based measure of the performance of non-investment grade US Bonds

MSCI EAFE: the MSCI EAFE Index (Morgan Stanley Capital International Europe, Australia and Far East Index) is a widely recognized benchmark of non US markets. It is an unmanaged index composed of a sample of companies’ representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends.

Investment grade bond index: The S&P 500 Investment grade corporate bond index, a sub-index of the S&P 500 Bond Index, seeks to measure the performance of the US corporate debt issued by constituents in the S&P 500 with an investment grade rating. The S&P 500 Bond index is designed to be a corporate-bond counterpart to the S&P 500, which is widely regarded as the best single gauge of large cap US equities.

Floating Rate Bond Index is a rules based, market-value weighted index engineered to measure the performance and characteristics of floating rate coupon U.S. Treasuries which have a maturity greater than 12 months.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and there is no guarantee of future results. All indices are unmananaged an may not be invested into directly. Stock investments include risks, including fluctuations in market price and loss of principal. No strategy assures success or protects against loss. Because of their narrow focus, sector investing includes risk subject to greater volatility than investing more broadly across multiple sectors



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The Bartometer

April 4, 2022

Hello Everyone,

I am now a Partner at American Strategic Advisors in Stamford Connecticut.

Now to the the important news that will continue to affect all of us.

1.   Putin and the Russians continue to penetrate and choke off the cities of Ukraine although there are talks of a cease fire.. This will most likely continue until the Ukranians give up, Putin gives up or there is an escalations that can be a disaster.

2.  As reported on CNBC, Inflationary pressures are 6-7% plus should continue to weigh heavily on the economy and overall costs in the USA.

3. Interest rates will continue to rise at least 3 to 5 more time unless the data changes

4. Earnings will slow if the war continues and inflation does not subside. This could cause a Global Recession

5. Overall the citizens of the USA want to travel and to spend money but they are being suppressed by the uncertainty of war, higher interest rates, higher inflation and spiking energy costs.

Earnings are expected to continue to grow this year about 3 to 7%, but after the bounce in the stock market over the last 2 weeks  the market is getting overbought again somewhat and getting near resistance. The market can continue to rally from here, BUT now I would consider reducing equity positions as there are too many head winds in the market that could become a problem in the next few weeks and months. The stocks that tend to do well in an inflationary environment are stocks that have pricing power. These companies can raise prices somewhat and people will continue to use their products. As prices go higher people tend to buy other substitute products. If you are nearing or in retirement, I would consider reducing equities by 5 to 10% to fixed accounts if you are over allocated to equities. I still like energy, and dividend stocks and over the longer term higher quality technology stocks.

Some of the INDEXES of the markets both equities and interest rates are below. The  source is Morningstar.com up until April 1, 2022 These are passive indexes.

Excerpts from Dr. Robert Genetski

Market Outlook

Nervous investors continue to produce highly erratic moves in stock prices. This week started

with substantial gains, then ended by giving back the gains. By yesterday, most stocks ended the week unchanged.

Daily moves in stock prices are usually in response to major news events. The gains earlier in the week appear consistent with a promise that peace talks could end the war. The declines later in the week were consistent with a lack of progress in the talks and with Russian troops being exposed to radiation at Chernobyl.

Most technical stock market indicators remain negative. The S&P500 is in the best shape since it is the only major index above its 200-day average. All others have failed to move above key resistance levels.

Economic indicators for March point to moderate growth of 2% to 3%. Rapid inflation continues to eat away at increases in spending and incomes. After a sharp increase, longer-term interest rates have leveled off. The spread between the 2-year Treasury and the 10-year Treasury is currently a mere 0.01 percentage point. The narrowing of this  spread suggests the Fed will be able quickly to contain inflation by rapidly raising short-term rates. This is highly unlikely.

Although the flood of money entering the economy slowed a bit in March. It will take much more than slowing to offset the surge this past year. With little change the S&P500, the index remains 29% above its underlying value. Investors should remain cautious in a highly erratic news driven market.

A Look Back

Today’s March employment report shows a strong rise of 426,000 private payroll jobs, a 4% annualized increase. Average weekly earnings increased at a 5% annual rate and the unemployment rate declined to 3.6%. As expected, the economy continues to perform well.

 Forces Impacting the near term outlook for stock prices

Economic Fundamentals     Mixed                                                             

Stock Valuation Over-Valued     29%

Monetary Policy:      Highly Expansive

Recommended Stock Exposure: 60%

This is a reduction of his stock allocation.

Dr Robert Genetski, American Strategic Advisors and LPL Financial are not affiliated. The opionions expressed in this material do necessarily reflect the views of LPL Financial.

S&P 500 Charts Source: AIQSystems.com

The S&P 500 is above. As you can see  it has rebounded over the last month where the AIQ Systems gave BUY signals on March 10th but it is again flashing topping action again. The S&P is masking what is happening to the very aggressive stocks  that have fast revenue growth but no real earnings as of yet and have dropped 30% or more.  Over the longer term I am still Bullish, but over the next few months I do not see any new highs in the S&P 500. I see the S&P not going above the old high and actually trying to test the 4200 level again on the S&P 500. So, any rally in the markets may be to REDUCE equities. In addition,  we will probably not have a recession this year, but in 2023 the chances go up for a recession. Stick with companies with solid earnings.

The SK-SD Stochastics chart is again getting very overbought as the fast line is now over 88 and getting overbought. MEANING?, the market is getting short term overbought again. See the ABOVE pointing Arrows? Everytime the SK-SD Stochatisc was above the 88 line the market topped out short term! Meaning I’m CAUTIOUS here, consider selling a little above the 88 line, where it is now.

MACD or Momentum line. Momentum is still going higher. The BUY signal was when the pink line crossed the Aqua line in early March, but now it has gone up a good deal. My AIQ models are NOT confirming Sell signals, I am saying they are flashing topping action.

The last chart is On Balance Volume. This chart shows as markets go up all volume is added and when markets fall then all volume is subtracted.  Notice volume is not that great when markets are rising. It should at least follow the market above and it is not.

Bottom Line

The market has had one of the worst quarters in a few years. The cause? Overvaluation, Higher Interest rates, INFLATION, Covid and the Russian situation. If interest rates rise  5 to 7 times like the Federal reserve says then regular bonds may be a SELL, and the only bonds I might consider FLOATING RATE BONDS. In addition if interest rates rise then financials tend to perform better then most. In addition, stocks with pricing power and with good consistent earnings do better than aggressive companies that have potential but no earnings.  Commodities tend to do well in an inflationary environment. Look for companies with revenue growth that has the potential of beating inflation.  I am still long term bullish but the short term could get very volatile where we could go a little higher on the markets but there is a good potential of testing the 4200 level on the S&P 500 again later in the year.. I am Cautious on the market over the next few months. If the market sells off and interest rates have gone up substantially then at the peak of pessimism begets bottoms in the market. I will continue to do my analysis and inform you when  a bottom looks iminant.

P

Support levels on the S&P 500 area are 4250, 4200, and 3800- 3850 areas and 3500. These might be BUY areas.

Please call me for a Review if you have not seen me in 6 months, it is important.

The Best to all of you,

 Joe

Joe Bartosiewicz, CFP® Investment Advisor Representative

Partner Wealth Manager, American Strategic Advisors,263 Tresser Blvd, Ste 100, Stamford CT

860-940-7020

SECURITIES AND ADVISORY SERVICES OFFERED THROUGH LPL Financial, a registered investment advisor, MEMBER FINRA/SIPC.

Charts provided by AIQ Systems:

Technical Analysis is based on a study of historical price movements and past trend patterns. There is no assurance that these market changes or trends can or will be duplicated shortly. It logically follows that historical precedent does not guarantee future results. Conclusions expressed in the Technical Analysis section are personal opinions: and may not be construed as recommendations to buy or sell anything. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. Each clients investment experience is unique to their circumstance and must be carefully planned with their advisor.

Disclaimer: The views expressed are not necessarily the view of LPL Financial or American Strategic Advisors, Inc. and should not be interpreted directly or indirectly as an offer to buy or sell any securities mentioned herein.Past performance cannot guarantee future results. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Please note that individual situations can vary. Therefore, the information presented in this letter should only be relied upon when coordinated with individual professional advice. *There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio in any given market environment. No investment strategy, such as asset allocation, can guarantee a profit or protect against loss in periods of declining values.

It is our goal to help investors by identifying changing market conditions. However, investors should be aware that no investment advisor can accurately predict all of the changes that may occur in the market.

The price of commodities is subject to substantial price fluctuations of short periods of time and may be affected by unpredictable international monetary and political policies. The market for commodities is widely unregulated and concentrated investing may lead to Sector investing may involve a greater degree of risk than investments with broader diversification.

Indexes cannot be invested in directly, are unmanaged and do not incur management fees, costs, and expenses.

Dow Jones Industrial Average: A price weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ.

S&P 500: The S&P 500 is an unmanaged indexed comprised of 500 widely held securities considered to be representative of the stock market in general.

NASDAQ: the NASDAQ Composite Index is an unmanaged, market weighted index of all over the counter common stocks traded on the National Association of Securities Dealers Automated Quotation System

(IWM) I Shares Russell 2000 ETF:  Which tracks the Russell 2000 index: which measures the performance of the small capitalization sector of the U.S. equity market.

The Merrill Lynch High Yield Master Index: A broad based measure of the performance of non-investment grade US Bonds

MSCI EAFE: the MSCI EAFE Index (Morgan Stanley Capital International Europe, Australia and Far East Index) is a widely recognized benchmark of non US markets. It is an unmanaged index composed of a sample of companies’ representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends.

Investment grade bond index: The S&P 500 Investment grade corporate bond index, a sub-index of the S&P 500 Bond Index, seeks to measure the performance of the US corporate debt issued by constituents in the S&P 500 with an investment grade rating. The S&P 500 Bond index is designed to be a corporate-bond counterpart to the S&P 500, which is widely regarded as the best single gauge of large cap US equities.

Floating Rate Bond Index is a rules based, market-value weighted index engineered to measure the performance and characteristics of floating rate coupon U.S. Treasuries which have a maturity greater than 12 months.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and there is no guarantee of future results. All indices are unmananaged an may not be invested into directly. Stock investments include risks, including fluctuations in market price and loss of principal. No strategy assures success or protects against loss. Because of their narrow focus, secot investing includes risk subject to greater volatility than investing more broadly across multiple sectors.

Creating and testing – 4 Candlestick Strategies

In this session Steve will evaluate the effectiveness of different trading strategies using the AIQ TradingExpert Pro Expert Design Studio.

View the recording 

https://aiqsystems.com/downloads/Testing-4-candlestick-strategies.mp4

The 4 entry strategies explained PDF click here

The four EDS files and accompanying backtest files, download these to your /wintes32/EDS Strategies folder. If your browser opens the file in a new tab, right click on the link instead and use save link as.

3 White Soldiers

Click to download EDS file 

Click to download Backtest file

Bullish Piercing Pattern

Click to download EDS file 

Click to download Backtest file

Harami Bullish

Click to download EDS file 

Click to download Backtest file

Candlestick Kicker

Click to download EDS file 

Click to download Backtest file

A plethora of market ERs – we’ve seen this before

As we reach the end of March 2022, the volatility in the markets continues with large range days and varying volume levels.

When the market is in a trend, we might see 2 or 3 high Expert Ratings warning us of a potential change in direction. At the tail end of 2021 and the first 10 days of 2022, we had 3 down signals, the last of the 3 at 1-99 was on 1/10/22. The market moved down solidly to the 33280 level before rallying 2/3rds of the down move.

There was no up rating at the bottom as prices moved back up and one up rating early February that didn’t pan out. However, between 2/24 and 3/16 there was six signals, 5 of them up. That’s in only 14 trading days.

Between the 2/24 up signal and the 3/14 up signal there were 9 distinct bullish ER rules showing. There was also several that were duplicated bullish ER rules. Add to this 4 new distinct ER rules on the up signal 3/16, that adds up to the busiest ER cluster for a very long time.

Here are the first 9 distinct rules contributing the cluster of ratings

  1. The Money Flow Indicator has reversed and is now advancing. In this sideways market, this is read as a bullish indication that the market could move up from this point because of the inflow of funds.
  2. The 21 day stochastic has advanced and crossed the 20% line and the price phase indicator is also in- creasing. In this strongly downtrending market this is taken as a strong bullish signal suggesting an increase in prices.
  3. The price phase indicator is negative but volume accumulation has started to advance. This is a non-conformation that, regardless of the type of market, is a bullish signal which usually results in an upward movement of the market.
  4. The Money Flow Indicator has reversed and is now advancing. In this downtrending market, this is taken as a weak bullish signal that could indicate an upward movement in the market averages.
  5. The advance/decline oscillator has turned positive with volume accumulation already positive. In this strong downward trend this is read as a strong non- confirmation of the current trend which could be followed by a reverse in price direction to the upside.
  6. The new high/new low indicator has reversed to the upside. This is a reliable bullish signal that is often followed by an upward movement in prices. In this strong downtrending market a reverse in trend could start shortly.
  7. Volume accumulation percentage is increasing and the 21 day stochastic has moved above the 20% line. In this downtrending market, this is taken as a strong bullish signal that could be followed by an upward price movement.
  8. The new high/new low indicator has reversed to the upside. This is a reliable bullish signal that is often followed by an upward movement in prices. In this weak downtrending market an uptrend could start shortly.
  9. Intraday low prices of the market have declined to a 21 day low. But the volume accumulation percentage is positive. In this market, this is taken as a weak bullish signal that could be followed by an upward price movement.

So when was the last time we saw this many ratings so close together?

It happens in clusters particularly in advance of a move against the current trend of the market. The ER system is inherently counter trend. This chart shows some cluster from 2009 – 2011.

One example was way back at the tail end of 2007, when another cluster of buy signals occurred in a similar fashion. Following a 100 down on 11/01/07 the market gave ground until 11/08/07, the first of 6 buy signals in 13 trading days through to 11/28/07

The market ERs are not perfect but they provide us with key insights into the way the internals are performing.

Where does the market go from here?

This chart above was back at the start of the 2007/8 bear market. So how do the chart patterns compare between 2022 and 2007/8? The chart below, on the left shows the 2007/8 market through early December 2007 following a strong move up after the cluster of up signals. The right charts shows current market with a strong up move following the cluster of up signals

There are some similarities between current price action and the topping pattern back in 2007, one being the measured way this pattern is emerging over several months. The chart below is the same time periods compared but with the ERs showing.

The bear market that followed in 2008 is in the Chart below.

The market moved down in a series of measured moves until we reached late September 2008 and the sharp downturn occurred. No guarantees we’re in the same market, but keep an eye out for those counter trend cluster ERs if we are, they may provide warning of rallies.

AIQ TradingExpert Pro is programmed with the knowledge and insight of respected technical analysts, experts who have developed technical analysis indicators and systems for the last 50 years. The up/down timing signals issued by TradingExpert Pro are based on this knowledge. Since TradingExpert Pro’s timing signals are generated on a scientific basis, free of bias or emotion, you get a disciplined, objective approach to stock market timing.

The timing signals produced by the AIQ expert system are in the form of Expert Ratings. Behind each Expert Rating is a set of rules that combine the sound principles of technical analysis with the experience of market professionals. Since no single technical indicator works all the time, using indicators in combination increases their reliability. For example, a rule is developed that combines the readings of two or more indicators.

This rule is then more reliable than the reading of a single indicator. Within TradingExpert Pro are two knowledge bases, one specifically designed to issue market timing signals and the other designed to issue stock timing signals. Each TradingExpert Pro knowledge base contains approximately 400 rules, but only a few “fire” on any given day.

In the language of expert systems, those rules that are found to be valid on a particular day are described as having “fired”. Rules can fire in opposite directions. When this happens, the bullish and bearish rules fight it out. It’s only when bullish rules dominate that the Expert Rating signal is bullish, or when bearish rules dominate that the Expert Rating signal is bearish.

Recent AIQ webinar recordings available

This year AIQ Systems celebrates its 35th year providing traders and investors the world’s leading intelligence trading software. Our roots are firmly established in the AI technical analysis field. The systems we use for Market Timing and Stock Analysis stand the test of time. 

As in any major analytical platform, we offer Trading System Design, Correlations Tools, Portfolio Management, Simulated Trading, Canned Strategies, our Unique Charting and much more.

If you were unable to attend the last two Zoom webinars, we have recorded the sessions and made them available for you in our education section on the website. AIQ Education and select the 2022 Webinars tab. We have also included the links to these recordings below this image.

Getting up to speed with AIQ TradingExpert Pro + Market Timing – how the AI Expert System works

Join Steve Hill, CEO of AIQ Systems for this hour long session. Includes an AMA (Ask Me Anything) at the end of the session.

Part 1. Getting up to speed with AIQ TradingExpert Pro

Part 2. Market Timing – how the AI Expert System works

View the recording  https://aiqsystems.com/downloads/markettiming.mp4

AIQ TradingExpert Pro – ETF Rotation Strategy using Relative Strength

In this hour-long session, Steve Hill, CEO of AIQ Systems covers some hidden features in AIQ TradingExpert Pro, and in the second half, explores an expanded ETF list of tickers using a tried and tested ETF rotation strategy.

View the recording https://aiqsystems.com/downloads/etfstrading.mp4

Market Timing zoom recording

If you missed out on the Zoom meet the other day, checkout this hour long recording presented by Steve Hill, CEO of AIQ Systems.

The first segment is an overview of TradingExpert Pro; something for new clients and a recap for existing clients.

In the second section Steve discusses the recent Expert Ratings on the market with analysis of the breadth data and some insights into the mechanics of the Market AI system.

Meeting Recording:
https://us02web.zoom.us/rec/share/2twQDYMYpMrgd38_w1Erleih8fwzhdoL0fXfRvIp6Ka-Mh9Bi3RWkBNywCxZ9Hif.xLTfendfU0Ipzi_9

PLUS register now for the next meet

Mar 16, 2022 04:30 PM Eastern Time (US and Canada)
In this hour-long session, Steve Hill, CEO of AIQ Systems will cover some hidden features in AIQ TradingExpert Pro, and in the second half, explore an expanded ETF list of tickers using a tried and tested ETF rotation strategy.

https://us02web.zoom.us/meeting/register/tZclfu-upjIjE9aJy-yGhEygx0uD55tJRsuH

After registering, you will receive a confirmation email containing information about joining the meeting.

Market Timing Expert System signals through 1-21-22

In this short video we’ll discuss the last 4 AI ratings on the Dow Jones Industrial average and examine the rules that fired to generate these signals.

AIQ TradingExpert Pro is programmed with the knowledge and insight of respected technical analysts, experts who have developed technical analysis indicators and systems for the last 50 years. The up/down timing signals issued by TradingExpert Pro are based on this knowledge. Since TradingExpert Pro’s timing signals are generated on a scientific basis, free of bias or emotion, you get a disciplined, objective approach to stock market timing.

The timing signals produced by the AIQ expert system are in the form of Expert Ratings. Behind each Expert Rating is a set of rules that combine the sound principles of technical analysis with the experience of market professionals. Since no single technical indicator works all the time, using indicators in combination increases their reliability. For example, a rule is developed that combines the readings of two or more indicators. This

rule is then more reliable than the reading of a single indicator. Within TradingExpert Pro are two knowledge bases, one specifically designed to issue market timing signals and the other designed to issue stock timing signals. Each TradingExpert Pro knowledge base contains approximately 400 rules, but only a few “fire” on any given day.

In the language of expert systems, those rules that are found to be valid on a particular day are described as having “fired”. Rules can fire in opposite directions. When this happens, the bullish and bearish rules fight it out. It’s only when bullish rules dominate that the Expert Rating signal is bullish, or when bearish rules dominate that the Expert Rating signal is bearish.

How’d the Santa Claus rally go?

December 20, 2021 we published this seasonality article on the Santa Claus rally https://aiqeducation.com/tis-the-season-to-be-cautious/. In a nutshell we looked at the last 5 trading days of the year and the first 2 trading days of the next year. We looked back over the last 7 years to see if the rally holds up.

The Dow clearly did show an average rally of over 1% during those 7 trading days.

So how did things go this Santa Claus rally?

Here’s the DIA the ETF that follows the Dow during the 7 day Santa Claus rally. It made a nice gain of 2.9%. 2 days later things turned down.

Bartometer

January 7, 2021

Hello Everyone,

Happy New Year! As the new Year starts let us look at 2021 which was a good year for the stock market, especially the S&P 500 which gained 28% mostly because of the mega giant stocks like Apple, Microsoft, Google etc. The fast-growing disruptor stocks that did so well in 2020, rising hundreds of percent were down in 2021. There were many panic situations and moments during the year and many challenges, including the highest inflation in decades, Covid 19, and supply chain issues causing shortages. Prices for houses continued to soar and this all leads to the biggest concern being elevated Inflation. In addition, most of the asset prices, including stocks and other assets, especially many of the largest companies, real estate, and other assets are in bubble territory.

The biggest unknown is how long the current bout of inflation will last and how is the Federal Reserve going to deal with it. The Fed was very dovish on inflation over the last year, but over the last couple of weeks they have become much more hawkish. This is one of the reasons the stock market has gotten hit over the first few days of 2022. Therefore, the Treasury yields have risen a good deal in the first week of 2022. There are other concerns that will affect 2022 like the mid-term elections, earnings growth, covid, international threats from China and Russia. That said, with so many things going, the two major factors that cause stocks to rise over the long term are:

Earnings and interest rates.

If earnings rise 5 to 10% per year or more and interest rates stay relatively low, the stock market as a whole should rise. But if earnings slow or go negative and interest rates rise to a point where people put their money in fixed accounts then by the competitive nature of investments the market will fall. When you look at the stock market over the long term, it has been one of the best classes in which to invest rising about 9-10% per year. With earnings expected to rise 7% or more and interest rates expecting to rise 3 times in 2022, volatility should rise over the next few months. Currently, the large tech stocks are expensive right now. I like cyclical stocks like consumer discretion stocks, financials that do well as interest rates rise, small cap value, dividend stocks, floating rate bonds, and international stocks that do well as the dollar falls, and more in the value sector. Dividend stocks generally are a buffer to the downside of the market somewhat. In addition, there are many ways to reduce risk now in the market or to hedge. Bonds other than Inflation protected bonds or floating rate are a Sell.

Finally, we will always have walls of worries about the markets and investing, and that is what makes the market direction unpredictable and uncertain. That is why it is important that we should always look at your long-term plan and not on the day-to-day gyrations of the market. Volatility will always happen, year to year. The only thing we can guarantee that will happen in the market is uncertainty and volatility.

Some of the INDEXES of the markets both equities and interest rates are below. The source is Morningstar.com up until January 7, 2022

S&P 500

Support on the S&P 500 is 4660, 4540, 4361 and 4288.
Support on the Dow is 35969, 34885, 34072, and 33503.
Support on the NASDAQ is 15509, 14929, and 14415.

These are areas that the markets could turn and long term investors may want to add to their positions. They are areas not specific numbers.

BOTTOM LINE

The markets in the first week of 2022 have been volatile. The technology stocks are taking it on the chin while the value and dividend stocks are rising. I think the value, discretionary stocks as well as energy and financials look good currently and going forward into the year. Interest rates will go higher, With the Federal Reserve pumping money into the markets any large decline in the markets should be short lived. Covid pressures should be nearly over this year and earnings should go higher. But I do expect more volatility this year that could see the markets dropping 10% or more. By the end of the year, I expect the markets to be somewhat higher, but there are very tough earnings hurdles to overcome. Bonds are on the Sell block except floating rate bonds and Treasury Inflation protected bonds. If you haven’t spoken with me in the last 6 months, please call me. Now more than ever this is very important. Call me at 860-940-7020.

Joe Bartosiewicz, CFP®
Investment Advisor Representative

92 High Street
Thomaston, CT 06787

Securities and advisory services offered through SagePoint Financial, Inc. (SPF), member FINRA/SIPC. SPF is separately owned and other entities and/or marketing names, products or services referenced here are independent of SPF. 800-552-3319 20 East Thomas Road Ste 2000 Phoenix AZ 85012

Disclaimer: The views expressed are not necessarily the view of Sage Point Financial, Inc. and should not be interpreted directly or indirectly as an offer to buy or sell any securities mentioned herein. Securities and Advisory services offered through Sage Point Financial Inc., Member FINRA/SIPC, an SEC-registered investment advisor.

Past performance cannot guarantee future results. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Please note that individual situations can vary. Therefore, the information presented in this letter should only be relied upon when coordinated with individual professional advice. *There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio in any given market environment. No investment strategy, such as asset allocation, can guarantee a profit or protect against loss in periods of declining values.
It is our goal to help investors by identifying changing market conditions. However, investors should be aware that no investment advisor can accurately predict all of the changes that may occur in the market.