Let’s face it, many investors have a problem with riding a trend. When things are going well they fret and worry about every blip in interest rates, housing starts, earnings estimates and the price of tea in China, which often keeps them from maximizing their profitability. Alternatively, when things really do fall apart they suddenly become “long-term investors” (in this case “long-term” is defined roughly as the time between the current time and the time they “puke” their portfolio – just before the bottom).
Which reminds me to invoke:
Jay’s Trading Maxim #6: Human nature is a detriment to investment success and should be avoided as much as, well, humanly possible.
So, it can help to have a few “go to” indicators, to help one objectively tilt to the bullish or bearish side. And we are NOT talking about “pinpoint precision timing” types of things here. Just simple, objective clues. Like this one.
Monthly MACD
Figure 1 displays the S&P 500 index monthly chart with the monthly MACD Indicator at the bottom.Figure 1 – Monthly S&P 500 Index with MACD (Courtesy AIQ TradingExpert)
The “trading rules” we will use are pretty simple:
*If the Monthly MACD closes a month above 0, then hold the S&P 500 Index the next month
*If the Monthly MACD closes a month below 0, then hold the Barclays Treasury Intermediate Index the next month
*We start our test on 11/30/1970.
*For the record, data for the Barclays Treasury Intermediate Index begins in January 1973 so prior to that we simply used an annual interest rate of 1% as a proxy.
Figure 2 displays the equity curves for:
*The strategy just explained (blue line)
*Buying and holding the S&P 500 Index (orange) line
Figure 2 – Growth of $1,000 using MACD System versus Buy-and-Hold
Figure 3 displays some “Facts and Figure” regarding relative performance.
Figures 3 – Comparative Results
For the record:
*$1,000 invested using the “System” grew to $143,739 by 6/30/2019
*$1,000 invested using buy-and-hold grew to $102,569 by 6/30/2019
*The “System” experienced a maximum drawdown (month-end) of -23.3% and the Worst 5-year % return was +7.3% (versus a maximum drawdown of -50.9% and a Worst 5-year % return of -29.1% for Buy-and-Hold)
So, from the chart in Figure 2 and the data in Figure 3 it is “obvious” that using MACD to decide when to be in or out of the market is clearly “better” than buy-and-hold. Right? Here is where it “gets interesting” for a couple of reasons.
First off, the MACD Method outperforms in the long run by virtue of missing a large part of severe bear markets every now and then. It also gets “whipsawed” more often than it “saves your sorry assets” during a big bear market. So, in reality it requires ALOT of discipline (and self-awareness) to actually follow over time.
Consider this: if you were actually using just this one method to decide when to be in or out of the market (which is NOT what I am recommending by the way) you would have gotten out at the end of October 2018 with the S&P 500 Index at 2,711.74. Now nine months later you would be sitting here with the S&P 500 Index flirting with 3,000 going “what the heck was I thinking about!?!?!?” In other words, while you would have missed the December 2018 meltdown, you also would have been sitting in treasuries throughout the entire 2019 rally to date.
Like I said, human nature, it’s a pain.
To fully appreciate what makes this strategy “tick”, consider Figures 4 and 5. Figure 4 displays the growth of equity when MACD is > 0 (during these times the S&P 500 Index is held).
Figure 4 – Growth of $1,000 invested in S&P 500 Index when MACD > 0.
Sort of the “When things are swell, things are great” scenario.
Figure 5 displays the growth of $1,000 for both intermediate-term treasuries AND the S&P 500 Index during those times when MACD > 0.
Figure 5 – Growth of $1,000 invested in Intermediate-term treasuries (blue) and the S&P 500 (orange) when MACD < 0.
Essentially a “Tortoise and the Hare” type of scenario.
Summary
Simple trend-following methods – whether they involve moving average using price, trend lines drawn on charts or the MACD type of approach detailed herein – can be very useful over time.
*They can help an investor to reduce that “Is this the top?” angst and sort of force them to just go with the flowing while the flowing is good.
*They can also help an investor avoid riding a major bear market all the way to the bottom – which is a good thing both financially and emotionally.
But everything comes with a cost. Trend-following methods will never get you in at the bottom nor out at the top, and you WILL experience whipsaws – i.e., times when you sell at one price and then are later forced to buy back at a higher price.
Consider it a “cost of doing business.”
Jay Kaeppel
Disclaimer: The data presented herein were obtained from various third-party sources. While I believe the data to be reliable, no representation is made as to, and no responsibility, warranty or liability is accepted for the accuracy or completeness of such information. The information, opinions and ideas expressed herein are for informational and educational purposes only and do not constitute and should not be construed as investment advice, an advertisement or offering of investment advisory services, or an offer to sell or a solicitation to buy any security.
I apologize for getting my newsletter out a week later than usual, my family had a needed short vacation.
Now for the good news, last month I stated that I was bullish on the markets and said I thought the markets would break out of the old 2886 level on the S&P and go to the 2954 level and possibly go to new highs. See last month’s Bartometer. The good news is the S&P is now at new highs and up another 6% since last month. The not so good news is that the small to midcap stocks are NOT at a new high and this divergence is showing me that we have a select narrow rally. The Small Cap index is 10% below its old top hit on 09/28/21018.
The Midcap Index is down 4.7% from last September as well. What does this mean? It means that there is a divergence in the stock market, and most of the participation is in the very large stocks like Microsoft, Netflix, etc. Even though this divergence is happening, my computer models are still somewhat bullish. Is it changing? You’ll see the answer in the chart below
Source: CNBC.com
Interest Outlook
As the major indexes reached all new highs, the Fed Chairman confirmed that the Fed would accept the lead from financial markets and cut their target interest rate by ¼%. Even though the Fed may reduce interest rates, there are many problems with Powell’s statements. His comments do not bode well for future moves. Especially if the economy goes into a recession over the next year or more. At this time long term rates should continue to be stabilized.
CURRENT EVENTS INFLUENCING MARKET MOVEMENT:
The Chinese tariff situation has calmed down somewhat allowing the markets to continue to rise as earnings from U.S. companies continue to grow. Overall the economy is doing relatively well. With a potential slowing of earnings ahead, the stock markets are now somewhat overbought. If interest rates stay at this very low level, then the stock market is still a decent value, but if interest rates start to head higher, the stock market ascent will then be over for a while. Overall, things look okay.
Index Averages
Some of the INDEXES of the markets both equities and interest rates are below. The source is Morningstar.com up until July 12, 2019. These are passive indexes.
*Dow Jones +18% S&P 500 +21% NASDAQ Aggressive growth +25% I Shares Russell 2000 ETF (IWM) Small cap +17% International Index (MSCI – EAFE ex USA) +11% Moderate Mutual Fund +11% Investment Grade Bonds (AAA) + 7% +2.64% High Yield Merrill Lynch High Yield Index +9% +4.26% Floating Rate Bond Index +5% +2.60% Fixed Bond Yields (10 year) +2.% Yield 2.63% The average Moderate Fund is up 11.6% this year fully invested as a 60% in stocks and 40% in bonds. And nothing in the money market *Explanation of each on the last page The S&P 500 Source: AIQ Systems on graphs
The S&P 500 has broken out to a new high last month on the Bartometer I was Bullish and stated that my computer models went to a Buy signal on June 4th at 2800 on the S&P 500. Now it is 3014. My computer models are still on the BUY-HOLD but the market is now getting very OVERBOUGHT and if I were in the market now I would start to take some money off the table and rebalance if you are in retirement.
The S&P 500 could go to 3130 to 3180 this year, but that would be a stretch and I don’t think the market has that much growth now for the rest of the year. Maybe 3-7% if that.
Notice the two trend-lines above at the top right of the top chart. There are two rising trend-lines, the blue arrow is pointing to it. This is call a RISING WEDGE. A Rising Wedge is a NEGATIVE pattern IF the trend-line is broken on the down side. This is a pattern that can be VOIDED if the S&P 500 closes above 3019 -3022 for 2-3 days with heavy volume. On the other hand, it the S&P 500 breaks below 2979, I will be getting Cautious. If it closes below 2979 then 2954 better hold or I will be getting VERY CAUTIOUS. But remember if the market closes above 3019-3022 for 2 to 3 days with good volume then the pattern is voided.
This market is extended, so even though I am relatively still positive, I’ll let the market tell me what to do. So if the S&P Closes below 2979 I am getting Cautious, and a close below 2954 decisively, then I am getting Very Cautious. That means a trimming of your assets, or a partial sell and to transfer to more of a conservative account. Right now I am still BULLISH.
The second chart below is the MACD, a cross down could correspond with the breaking of 2954 DECISIVELY on a close. Notice in June it crossed above, see blue arrow, this was a great place to BUY. Now that it is much higher and with the extension of the market I gave you the information as to where the market could reverse and what to look for.
Chart Source: Forexop.com
The rising wedge pattern is characterized by a chart pattern which forms when the market makes higher highs and higher lows with a contracting range. When this pattern is found in an uptrend, it is considered a reversal pattern, as the contraction of the range indicates that the uptrend is losing strength.
When this pattern is found in a downtrend, it is considered a bearish pattern, as the market range becomes narrower into the correction, indicating that the correction is losing strength and that the resumption of the downtrend is in the making.
In a rising wedge, both boundary lines slant up from left to right. Although both lines point in the same direction, the lower line rises at a steeper angle than the upper one. Prices usually decline after breaking through the lower boundary line.
As far as volumes are concerned, they keep on declining with each new price advance or wave up, indicating that the demand is weakening at the higher price level. A rising wedge is more reliable when found in a bearish market. In a bullish trend what seems to be a Rising Wedge may be a Flag or a Pennant (stepbrother of a wedge) requiring about four weeks to complete.
Rising Wedges are not guaranteed, so the 3019-3022 level and staying there for a couple of days could void this negative pattern. A break decisively on a close below 2979 could satisfy the Rising Wedge.
Source: Wikipedia
*A Support or support level is the level at which buyers tend to purchase or into a stock or index. It refers to the stock share price that a company or index should hold and start to rise. When a price of the stock falls towards its support level, the support level holds and is confirmed, or the stock continues to decline, and the support level must change.
Support levels on the S&P 500 area are 2986, 2954, 2910, and 2780 areas. These might be BUY areas.
Support levels on the NASDAQ are 8175, 7884, 7771, and 7657.
On the Dow Jones support is at 26918, 26708, 25,538 and 26318.
These may be safer areas to get into the equity markets on support levels slowly. RESISTANCE LEVEL ON THE S&P 500 IS 3019 but rising as market goes up. If there is a favorable tariff settlement, the market should rise short term.
Source: Investopedia
THE BOTTOM LINE:
The S&P 500 has reached a new high, and as long as 2954 does not break down decisively with a lot a volume I am still relatively positive. We are positively OVERBOUGHT here short, so THIS IS NOT A TIME TO BUY a lot of Indexes here in my opinion I am still relatively Bullish.
The S&P needs to close above 3019-3022 and stay there two days to form another base from which to rise more, but if the S&P breaks below 2979, and daily this trend-line is rising, I will be getting Cautious, and a convincing close below 2954 will get me Very Cautious.
Best to all of you, Joe Joe Bartosiewicz, CFP® Investment Advisor Representative
860-940-7020 or 860-404-0408
SECURITIES AND ADVISORY SERVICES OFFERED THROUGH SAGE POINT FINANCIAL INC., MEMBER FINRA/SIPC, AND SEC-REGISTERED INVESTMENT ADVISOR. 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. 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. The price of commodities is subject to substantial price fluctuations of short periods 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 indirectly, are unmanaged, and do not incur management fees, costs, and expenses. Dow Jones Industrial Average: A weighted price 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. A Moderate Mutual Fund risk mutual has approximately 50-70% of its portfolio in different equities, from growth, income stocks, international and emerging markets stocks to 30-50% of its portfolio indifferent categories of bonds and cash. It seeks capital appreciation with a low to moderate level of current income. 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 rule-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. Joe Bartosiewicz, CFP® 5 Colby Way Avon, CT 06001 860-940-7020 or 860-404-0408
When AIQ released StockExpert in 1987, the Expert Ratings were the foundation of the system. This release represented the first software product developed for personal computers that used Artificial Intelligence to signal equity movement. AIQ’s founder and knowledge engineer, Dr. J.D. Smith, chose to use expert system technology that was developed at Stanford University in the late 60’s. An expert system uses a knowledge based rule driven structure.
Dr. Smith tested hundreds of technical rules that had been published by respected analysts.Those rules that tested well were placed into a knowledge base of rules. Rules were weighted based on their effectiveness. When a series of bullish rules was triggered, an Expert Rating buy signal was generated. A series of bearish rules generated an Expert Rating sell signal.
In this video Steve Hill explains the internal rules of the Expert System that generated the signal
The sell signal that the AI system issued on April 18, 2019 presaged a 2000 point move down. Things have now changed. On June 4, 2019 the AI system issued a buy signal.
One of the best pieces of advice I ever got was this: “Don’t tell the market what it’s supposed to do, let the market tell you what you’re supposed to do.”
That is profound. And it really makes me wish I could remember the name of the guy who said it. Sorry dude. Anyway, whoever and wherever you are, thank you Sir.
Think about it for a moment. Consider all the “forecasts”, “predictions” and “guides” to “what is next for the stock market” that you have heard during the time that you’ve followed the financial markets. Now consider how many of those actually turned out to be correct. Chances are the percentage is fairly low.
So how do you “let the market tell you what to do?” Well, like everything else, there are lots of different ways to do it. Let’s consider a small sampling.
Basic Trend-Following
Figure 1 displays the Dow Industrials, the Nasdaq 100, the S&P 500 and the Russell 2000 clockwise form the upper left. Each displays a 200-day moving average and an overhead resistance point.
The goal is to move back above the resistance points and extend the bull market. But the real key is for them to remain in an “uptrend”, i.e.,:
*Price above 200-day MA = GOOD
*Price below 200-day MA = BAD
Here is the tricky part. As you can see, a simple cross of the 200-day moving average for any index may or may not be a harbinger of trouble. That is, there is nothing “magic” about any moving average. In a perfect world we would state that: “A warning sign occurs when the majority of indexes drop below their respective 200-day moving average.”
Yet in both October 2018 and May 2019 all four indexes dropped below their MA’s and still the world did not fall apart, and we did not plunge into a major bear market. And as we sit, all four indexes are now back above their MA’s. So, what’s the moral of the story? Simple – two things:
The fact remains that major bear markets (i.e., the 1 to 3 year -30% or more variety) unfold with all the major averages below their 200-day moving averages. So, it is important to continue to pay attention.
Whipsaws are a fact of life when it comes to moving averages.
The problem then is that #2 causes a lot of investors to forget or simply dismiss #1.
Here is my advice: Don’t be one of those people. While a drop below a specific moving average by most or all the indexes may not mean “SELL EVERYTHING” now, it will ultimately mean “SEEK SHELTER” eventually as the next major bear market unfolds. That is not a “prediction”, that is simply math.
The Bellwethers
I have written in the past about several tickers that I like to track for “clues” about the overall market. Once again, nothing “magic” about these tickers, but they do have a history of topping out before the major averages prior to bear markets. So, what are they saying? See Figure 2.
SMH (semiconductor ETF): Experienced a false breakout to new highs in April, then plunged. Typically, not a good sign, but it has stabilized for now and is now back above its 200-day MA.
Dow Transports: On a “classic” technical analysis basis, this is an “ugly chart.” Major overhead resistance, not even an attempt to test that resistance since the top last September and price currently below the 200-day MA.
ZIV (inverse VIX ETF): Well below it’s all-time high (albeit well above its key support level), slightly above it’s 200-day MA and sort of seems to be trapped in a range. Doesn’t necessarily scream “SELL”, but the point is it is not suggesting bullish things for the market at the moment.
BID (Sotheby’s – which holds high-end auctions): Just ugly until a buyout offer just appeared. Looks like this bellwether will be going away.
No one should take any action based solely on the action of these bellwethers. But the main thing to note is that these “key” (at least in my market-addled mind) things is that they are intended to be a “look behind the curtain”:
*If the bellwethers are exuding strength overall = GOOD
*If the bellwethers are not exuding strength overall = BAD (or at least not “GOOD”)
A Longer-Term Trend-Following Method
In this article I detailed a longer-term trend-following method that was inspired by an article written by famed investor and Forbes columnist Ken Fisher. The gist is that a top is not formed until the S&P 500 Index goes three calendar months without making a new high. It made a new high in May, so the earliest this method could trigger an “alert” would be the end of August (assuming the S&P 500 Index does NOT trade above it’s May high in the interim.
Jay Kaeppel
Disclaimer: The data presented herein were obtained from various third-party sources. While I believe the data to be reliable, no representation is made as to, and no responsibility, warranty or liability is accepted for the accuracy or completeness of such information. The information, opinions and ideas expressed herein are for informational and educational purposes only and do not constitute and should not be construed as investment advice, an advertisement or offering of investment advisory services, or an offer to sell or a solicitation to buy any security.
The major stock indexes fell about 5% in May and rebounded most of the loss in June so far in one week. Source: CNBC.com
CURRENT EVENTS INFLUENCING MARKET MOVEMENT:
Stocks fell because of the Chinese and the 5% Mexican tariff announcement. There will probably be a positive announcement on the Mexican tariff front as tariffs will hurt our economy and the auto industry. In a positive development, Fed officials said they would be open to reducing interest rates if the tariffs weaken the economy. The current interest rate on the ten-year bond has dropped from 3.2% on the ten-year bond to about 2.10% now just in roughly six months. The affordability of buying a new house has gotten much better.
Trump will do what he can to shore up the economy, and if the markets fall, he is keenly aware of stemming any significant decline in the stock market as he wants to be reelected. The jobs report was a little weaker than was expected; that is why the Fed may reduce interest rates to keep the economy on an upward trajectory consistent with a 2-3% per year growth in the GDP. Overall, I am still positive on the economy unless full tariffs are enacted on the Mexican and the Chinese economies.
If they are expanded to the 25% fully enacted, I will be getting more cautious on the economy and the stock markets.
INTEREST RATE SCENARIO
The Federal funds rate is about 50 basis points or half of 1% higher than the two and five year Treasury Notes and has historically indicated that a recession is looming. The next few months will indicate whether the economy will soften. At this point, I don’t think it will decline as much as to go into recession, but there are still risks. Trump will determine what will happen to the economy. If the tariff situation is resolved, then I think the economy will still be in a growth phase, but if the tariffs are not resolved and get worse, the risks of a recession will increase dramatically.
MARKET RECAP:
Last month on my May 5th Bartometer I said that if the S&P 500 closes below 2,886 I will get VERY CAUTIOUS and It did. After that, it proceeded to 2,740 a drop OF 5%, AND my computer models gave a BUY signal ON 6/5/19, the big up day at 2,800, and it rallied to an intraday high of 2,885.85 and closed at 2875. Even though we are on the BUY-HOLD signal, I would like the S&P 500 to break out of 2886, preferably the 2,893 level and stay there for 2 to 3 days for me to believe the rally can approach the old highs of 2,954. See the charts for an explanation.
Index Averages
Some of the INDEXES of the markets both equities and interest rates are below. The source is Morningstar.com up until June 7, 2019.
*Dow Jones +12.50% S&P 500 +15.60% NASDAQ Aggressive growth +17.50% I Shares Russell 2000 ETF (IWM) Small cap +12.97% International Index (MSCI – EAFE ex USA) +9.97% Moderate Mutual Fund +8.20% Investment Grade Bonds (AAA) +7.03% +2.64% High Yield Merrill Lynch High Yield Index +7.39% +4.26% Floating Rate Bond Index +4.90% +2.60% Fixed Bond Yields (10 year) +2.10% Yield 2.63%
The average Moderate Fund is up 8.2% this year fully invested as a 60% in stocks and 40% in bonds.
If interest rates are peaking and look to be flattening or declining over the next year then investment grade or multisector bonds technically might be better than floating rate bonds. But diversification is important.
The S&P 500
Source: AIQ Systems
The S&P is above. Last month AIQ gave a SELL signal on April 18th but I went to a VERY CAUTIOUS the close below 2,886. The S&P dropped 5% after it closed below 2,886.
My models went to a BUY signal at 2,800 on 6/05/2019 the S&P now we are right back up to 2,875. Where do we go from here? If the 2,893 level can be broken on the Upside which I think it can and stay there for 2-3 days , then the S&P should approach its old high of 2,954 it hit on May 1, 2019. Notice the graph below the S&P. This chart is the SK-SD stochastics, it is breaking out on the upside and it shows the market is oversold and could continue to rally.
Source: Investopedia
*A Support or support level is the level at which buyers tend to purchase or into a stock or index. It refers to the stock share price that a company or index should hold and start to rise. When a price of the stock falls towards its support level, the support level holds and is confirmed, or the stock continues to decline, and the support level must change.
Support levels on the S&P 500 area are 2865, 2811, 2740, and 2683 areas. These might be BUY areas.
Support levels on the NASDAQ are 7704, 7414, 7291, and 7171.
On the Dow Jones support is at 25,943, 25739, 25,538 and 25,376. These may be safer areas to get into the equity markets on support levels slowly.
RESISTANCE LEVEL ON THE S&P 500 IS 2885. If there is a favorable tariff settlement, the market should rise short term.
THE BOTTOM LINE:
The S&P 500 is right at the point where it needs to break out of 2,893. I am still Moderately Bullish on the market and think it will break out. My computer technical models are on a short term buy signal, so do I think the S&P will breakout above 2,954, the old high it hit on May 1, 2019? We will see, but if it approaches that level, it will be imperative to watch the 2,954 level to see if it turns down. I will be watching that level to see if it is a breakout. If it cannot, then I would become Cautious again.
Best to all of you,
Joe Bartosiewicz, CFP® Investment Advisor Representative
5 Colby Way Avon, CT 06001 860-940-7020 or 860-404-0408
Contact information: SECURITIES AND ADVISORY SERVICES OFFERED THROUGH SAGE POINT FINANCIAL INC., MEMBER FINRA/SIPC, AND SEC-REGISTERED INVESTMENT ADVISOR.
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.
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, and 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. The price of commodities is subject to substantial price fluctuations of short periods 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 indirectly, are unmanaged, and do not incur management fees, costs, and expenses. Dow Jones Industrial Average: A weighted price 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. A Moderate Mutual Fund risk mutual has approximately 50-70% of its portfolio in different equities, from growth, income stocks, international and emerging markets stocks to 30-50% of its portfolio indifferent categories of bonds and cash. It seeks capital appreciation with a low to moderate level of current income. 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 rule-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.
