Bartometer

June 11, 2021

Hello Everyone,

On my Bartometer in December, I thought the S&P 500 would reach 4200 to 4400 this year. The S&P is now at 4247. My computer models are still relatively positive, but I am starting to show cracks in the dam. The stocks that were big winners last year, like the electric vehicles, the new internet of things, the super advanced genomics, innovation stocks that were up 120% or more are down for the year about 5-20%. The Value stocks continue their winning pattern, however, over the last couple of weeks the aggressive stocks are starting to turn as the Value stocks are now fairly valued. If you have disrupter stocks in your portfolio and are great companies then it is important to keep the fund or ETFs if they are good, as these are the companies that are the next big winners over the long term.

My Computer models are still on a longer term Buy-Hold, but now some are giving early warning Sell signals on the weekly chart that are not confirmed, but need to be watched. See page 3 on the S&P to keep your eye on the exit door when the market starts to look like it is topping out. Currently, the market is 27% overvalued.

As you know house prices are soaring and could continue for a little while longer as copper prices, lumber prices rise. But when interest rates start to rise and there is more supply on the market as the eviction and foreclosure moratorium is about over, then real estate prices should wain somewhat.

If the stock market sells off from here, you may want to add more to your stock portfolio, if you have a longer-term horizon. Please call me for guidance in the allocation of your 401(k) and a strategy meeting with me if you have not spoken to me in 6 months.

I have been liking the Value sector over the last 7 months, now the growth sector, is starting to look better for purchase.

Some of the INDEXES of the markets both equities and interest rates are below.

Dow Jones +13.63%
S&P 500 +13.88%
EQUAL WEIGHTED S&P 500 +19.87%
NASDAQ Aggressive growth +8.9%
Large Cap Value +15%
I Shares Russell 2000 ETF (IWM) Small cap +18%
Midcap stock funds +18.1%
International Index (MSCI – EAFE ex USA +11.7%
International Emerging Markets +7.4%
Financial stocks +28%
Energy stocks +47%
Healthcare Stocks +10%

Moderate Mutual Fund Investment Grade Bonds (AAA) Long duration -1.86%
High Yield Merrill Lynch High Yield Index +2.1%

Floating Rate Bond Funds +2.61%
Short Term Bond +.6%
Multi sector bond funds +1.9%

Gold -1.47%

10 year Bond Yield 1.47%

Moderate Fund +8%

Average Disruptor Fund Aggressive growth -5%

Classicalprinciples.com and Robert Genetskis Excerpts

Market Outlook

Stocks were mostly higher this past week. The S&P 500 gained 1% moving to a new all-time high. The Nasdaq and QQQs rose 3% to within a fraction of their all-time highs while the Dow was down slightly and small caps were mixed.

Overall, stocks continue to show strong upward momentum. At 4239, the S&P500 is 27% above its fundamental value. Stocks clearly are overvalued. In spite of this overvaluation, the outlook for the market remains positive. After a bit of tapering in March and April, the Fed purchased $125 billion in securities in May. The Fed’s policy last year has led to double-digit increases in spending and wages during the first half of this year.

As the Fed pumps a significant amount of money into the economy, the impact on financial markets is immediate. In spite of the market’s overvaluation, the odds still favor higher rather than lower stock prices. The flood of new money into the economy has also depressed interest rates. Although the Fed’s target rate remains 0%, US interest rates are higher than in Europe and Japan. Foreign investors are ignoring US inflation and seeking out higher relative interest rates. This provides still another force driving interest rates temporarily lower.

As a result, rates for longer-term bonds have moved sharply lower. The Fed is settling up both the economy and financial markets for a dramatic and damaging correction.

For now, since the Fed insists on refilling a punch bowl that is already overflowing, all we can do is—Party on! A Look Back The explosive increases in consumer prices for May brought year-over-year inflation to 5% for the total index and 4% after eliminating food and energy prices. This was the highest yearly inflation in over a decade.

Stock Valuation: S&P 500 27% Overvalued
Economic Fundamentals: Positive
Monetary Policy; Highly Expansive
.
Source: Classical Principles.com

Above is the S&P 500, the long-term WEEKLY chart is shown. You can see the upward channel on the chart. AIQ is giving a SELL signal that I not confirmed but is flashing Sell signals. I do not want it to break 410 on a close. Because this channel has been a long-term Bullish channel since the bottom of the market last March. I am keeping my eyes on the 410 area of the SPY or about the 4100 level on the S&P. This is long term support, but remember, it is rising weekly, so next week it goes to 414 on the Spy, etc,

The Momentum chart is next. This market is extended, and I do not want to see the pink line break the blue line. That would be negative.

The next graph is the SK-SD Stochastics graph. It shows when the market is very over bought. Anything over 88 is overbought and it is at 96. When the red breaks the green line, it is on a sell. It is almost there.

The bottom chart is volume. When the market is going up you want it to go up on heavy volume. The volume is actually sub normal, another negative sign.

So what am I saying? I am saying that even though I am still Bullish long term, there are storm clouds out there. Watch the trend line break of 410 to 415 to see if it holds or not as there may be trouble. Not yet, but it is a Watch for the reduce.

Source: AIQsystems.com

Support levels on the S&P 500 area are 4100, 3700 3070. These may be safer areas to get into the equity markets on support levels slowly on the accumulation areas.

THE BOTTOM LINE:

I am still relatively Bullish on the market, but as you can see above, the market is getting overvalued. My target of 4400 on the S&P 500 is quickly approaching. The Value sector of the market and the mid and large value sectors are now fairly valued. Over the longer-term, technology, up about 8.90% should perform the best. Keep a disciplined approach to investing and do not chase the performers, you may get hurt. I like inflationary protection investments for a percentage of money.

Joe Bartosiewicz, CFP®
92 High Street
Thomaston, CT 06787 and
7501 East MCDowell RD

7501 East McDowll Rd #2172 Scottsdale, AZ 85257

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.

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 in different 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.

Bartometer

May 8, 2021

Hello Everyone,

Over the last month the stock markets continue to rise. The Value sector, consisting of energy, financial, metals manufacturing and more are leading the way higher. These are the stocks that benefit from people and the companies in the economy that are benefiting from the recovery. Technology on the other hand continues to languish somewhat as they do not benefit as much as when people were confined to their homes using technology. On my Bartometer in December I thought the S&P 500 would reach 4200 to 4400 this year and the S&P is now nicely over 4200. Short term the markets are still relatively Bullish, but it is now 26% over valued. I feel that there is dramatic inflationary pressure in the economy as Copper, lumber, energy, wages and commodities in general are rising. This will put upward pressure on inflation but because the Federal Reserve will be somewhat restrained in raising interest rates because they cannot afford to pay higher rates to service the debt themselves. If, however, inflationary pressures continue to manifest themselves month after month then the Federal Reserve will have no choice but to raise interest rates sometime over the next year.

My Computer models are still on longer term Buy-Hold in the market and there are some worries, but the market technicals are still relatively ok, Albeit very overbought. This means to enjoy the ride, but we need to keep our hand on the exit door anytime I get long Term SELL signals. The NASDAQ is weak compared to the overall market.

As you know house prices are soaring and could continue for a little while longer as copper prices, lumber prices skyrocket. But if interest rates start to rise and the economy slows then houses prices should level off or even decline slightly, but house prices are still projected to go higher over the next year. If the stock market sells off from here, you may want to add more to your stock portfolio, if you have a longer-term horizon.

I still like the growth sector longer term, but the sector that should outperform going forward and as the economy rebounds, should be VALUE stocks.

Some of the INDEXES of the markets both equities and interest rates are below. The source is Morningstar.com up until May 07, 2021. These are passive indexes. YTD

Dow Jones +14.3%
S&P 500 +13.2%
EQUAL WEIGHTED S&P 500 +19.2%
NASDAQ Aggressive growth +6.6%
Large Cap Value +13.1%
I Shares Russell 2000 ETF (IWM) Small cap +15.1%
Midcap stock funds +18.1%
International Index (MSCI – EAFE ex USA +13.7%
International Emerging Markets +5.6%
Financial stocks +28%
Energy stocks +43%
Healthcare Stocks +9.0%
Moderate Mutual Fund Investment Grade Bonds (AAA) Long duration -3.86%
High Yield Merrill Lynch High Yield Index +2.3%
Floating Rate Bond Funds +2.01%
Short Term Bond +.2%
Multi sector bond funds +1.7%
Gold -3.8%
10 year Bond Yield 1.60%

Classicalprinciples.com and Robert Genetskis Excerpts

Market Outlook

Stocks were mixed this past week. The Dow was up 1½% to a new all-time high. Other key indexes were flat to down. The S&P500 was unchanged while the Nasdaq and QQQs fell 2%- 3%. Amid signs of an economic boom, foreign Central Bank heads are talking about tapering monetary stimulus. Some Fed officials have also referred to a need for adjusting policy. The Fed is lagging the rest of the world in recognizing the likely damage from current policy.

Expect more hints from the Fed about the slowing its purchases of securities. Stocks will continue to take hits whenever there are signs of a change in Fed policy. Stocks will take another hit when the Fed begins to raise interest rates. These hits to the market are likely to be temporary setbacks. The real hit to stocks will come when the Fed makes a move to significantly slow the growth in the money supply. It’s likely we are still a long way from that move. Although the S&P500 remains 26% above its fundamental value, the Fed’s ongoing purchases of securities should keep stock prices elevated. For now, stay bullish and enjoy the ride. The recent drop in longer-term interest rates is a temporary development. If you are considering borrowing money, do it now. As inflationary pressures continue to build, look for interest rates to head higher.

A Look Back

The economy soared going into the first quarter with current dollar spending (GDP) up at an 11% annual rate. Recent data indicate business continues to increase rapidly this quarter. Today’s job report shows private payroll jobs increased by 218,000 in April. This was well below expectations. The latest numbers show employment levels remain about 5% below its prior peak. Government payments have encouraged people not to work. This keeps employment down and adds to a shortage of workers.

Stock Valuation: S&P 500 26% Overvalued
Economic Fundamentals: Positive
Monetary Policy; Highly Expansive

.
Source: Classical Principles.com

Above is the S&P 500 and the tracking stock with the symbol the SPY. It is currently up 13.27% for the year. Notice the resistance level of 422.12. If the SPY closes below 411, I will get Cautious, but a drop below 410 and I would get even more Cautious. But if on Monday the Spy closes above 422.5, then we continue to look for higher highs!

402 on the S&P is major support and I wouldn’t want it to close below that level. Any close below 402 would make me Very Cautious.
Over all, I am still relatively Bullish, but I need to be concerned that this market is going up too fast and should revert to the mean.

Momentum is still relatively good, but if it closes below the 410 level on the SPY, it will get me to reduce equities somewhat.

Support levels on the S&P 500 area are 4110, 4100, 4020, 3650.

▪ These may be safer areas to get into the equity markets on support levels slowly on the accumulation areas.

THE BOTTOM LINE:

I am still relatively Bullish on the market, but my total target of 4400 on the S&P 500 is quickly approaching. The Value sector of the market and mid and large value still look good over the short term, but over the longer-term technology which is only up about 6% should perform the best. Keep a disciplined approach to investing and don’t chase the performers, you may get hurt. I like inflationary protection investments for a percentage of money.

Best to all of you,

Joe Bartosiewicz, CFP®
Investment Advisor Representative
Contact information:


860-940-7020.
Joe Bartosiewicz, CFP®
92 High Street
Thomaston, CT 06787 and
7501 East MCDowell RD 2172
Scottsdale, AZ 85257

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.

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 in different 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.


Rate Of Change With Bands

The importable AIQ EDS file based on Vitali Apirine’s article in this issue,of Stocks & Commodities magazine “Rate Of Change With Bands,” can be obtained on request via email to info@TradersEdgeSystems.com. The code is also shown here:

!Rate Of Change With Bands 
!Author: Vitali Aprine, TASC Mar 2021
!Coded by: Rich Denning, 01/11/2021
!INPUTS:
rocLen is 12.
emaLen is 3.
smaLen is 12.
C is [close].
ROC is (C - valresult(C,rocLen)) / valresult(C,rocLen)*100.
smaSqr is simpleavg(ROC*ROC,smaLen).
ROCdev is sqrt(smaSqr).
emaROC is expavg(ROC,emaLen).
upROCB is ROCdev.
dnROCB is - ROCdev.

Code for the ROCB indicator is set up in the AIQ code file. Figure 10 shows the indicators on a chart of Apple Inc. (AAPL). The red line in the first panel is the upper ROC band and the green line is the smoothed ROC. In the lower panel, the red line is the lower ROC band and the green line is the smoothed ROC.

Sample Chart

FIGURE 10: AIQ. The ROCB indicators are shown on a chart of Apple Inc. (AAPL). The red line in the first panel is the upper ROC band and the green line is the smoothed ROC. In the lower panel, the red line is the lower ROC band and the green line is the smoothed ROC.

—Richard Denning
info@TradersEdgeSystems.com
for AIQ Systems

Bartometer

April 10, 2021

Hello Everyone,

The stock markets continue to rise over the last month with the Value sector leading the way. The energy, financial, airlines, cruise ship sector and more have followed right along the last few months as well. Over the short term the Value sector still looks good going forward with the recovery of the economy and the realization that the Covid 19 virus will soon subside. I still like the growth sector involving technology over the longer term, but the sector that should outperform shorter term as the economy is recovering is the value sector. On the Bartometer at the end of last year I thought the S&P 500 would hit 4200-4400. As of Friday the S&P was 4094. My AIQ Trading Expert and my other technical computer algorithms are still at a BUY-HOLD signal. Remember that this market is very overvalued and is selling at 24 times earnings, and is currently 21% overvalued based on earnings and interest rates.. Earnings growth has to be great for this market to continue higher.

Interest rates have climbed to the 1.7% level on the 10-year government bond. Bonds, in general, have fallen this year from 0-to 13%, with Floating rate bonds actually rising 2% in 2021. Floating rate bonds and variable interest rate bonds both pay a higher rate as interest rates rise. The interest rate rise over the short term should be more subdued based on Federal Chairman Reserve Powell’s testimony that he is dovish on interest rate rises. I believe over the longer term with the deficit continuing to rise that the market will push interest rates higher. I also believe that inflationary pressures will also push the need for interest rates to rise over the next year or two. Allocations for bonds in your portfolio should be more concentrated in shorter duration, and in the floating rate bond sector/ Treasury inflation-protected Strips or TIPS. Please call me to strategize your portfolio holistically.

Some of the INDEXES of the markets both equities and interest rates are below. The source is Morningstar.com up until April 09, 2021.

Dow Jones +10.97%
S&P 500 +10.0%
EQUAL WEIGHTED S&P 500 +14%
NASDAQ Aggressive growth +7.58%
Large Cap Value +9.68%
I Shares Russell 2000 ETF (IWM) Small cap +13.34%
Midcap stock funds +14.0%
International Index (MSCI – EAFE ex USA +9%
International Emerging Markets +3.6%
Financial stocks +13%
Energy stocks +28%
Healthcare Stocks +.9% Moderate Mutual Fund Investment Grade Bonds (AAA) Long duration +5.1%
High Yield Merrill Lynch High Yield Index +1.4% Floating Rate Bond Funds +1.7%
Short Term Bond +.0%
Multi sector bond funds +.3% Gold -8.43% Long Term 20 year Bond fund -12% 10 year Bond Yield 1.62%

Classicalprinciples.com and Robert Genetskis Excerpts

Market Outlook

Stocks turned in a mixed performance this past week. The Nasdaq and QQQs had the biggest gains while the S&P500 and Dow rose to new all-time highs. In contrast, small-cap stocks fell ½%. Weekly moves show stocks rotating into and out of different areas, while the overall market trend continues to be positive.

The main force behind the upward move is a highly expansive Fed policy. Monetary stimulus creates a surplus of liquidity for stocks and ignited gains in business activity. This week’s sharp reversal in longer-term interest rates provided another spark for sending prices higher

The Biden Administration tried to discourage investors by proposing more destructive policies. Investors were not discouraged. Cautious statements by some Democrats are viewed as a possible barrier to the more these destructive policy proposals. The Fed continues to add kindling to the inflationary fire and promises it will continue to do so. Although longer-term interest rates moved lower this past week, implied inflation expectations remain high. The implied inflation expectation is currently 2.3%. It is measured by subtracting the inflation-adjusted 10-year T-bond yield from the actual 10-year T-bond yield.

Although core inflation rates remain very low, the bond market expects higher inflation. The market is more reliable. As for stocks, the gains in the S&P500 move the index to 21% above fundamental value.

Stocks are overextended and the risks of a reversal, or at least a leveling off, are rising. In spite of the heightened risks and the likelihood for some temporary setback, ongoing monetary stimulus has the potential to continue to drive stock prices higher.

Stock Valuation: S&P 500 21% Overvalued
Economic Fundamentals: Positive
Monetary Policy; Highly Expansive
.
Source: Classical Principles.com

S & P 500

The market weighted S&P 500 which weights the largest companies like Apple, Microsoft, Google and more. This index is up 10% in 2021. 500 of the largest stocks in the USA are in this index. If you look to thchart above you will see an ASCENDING CHANNEL. An ascending channel is Bullish and if it breaks out above the top of the channel it can signal a Continuation of the move higher. Many times the market will top out at the top of the channel, right where it is now. If it breaks down below the channel then it can signal a possible trend change. There is a definite channel trend here HIGHER. But could have a short term setback here.

The indicator below the price chart is the MACD, or momentum indicator has turned to the upside, See the pink line breaking out of the blue line, another Bullish signal

The bottom indicator is SD-SK Stochastics is now above the 88 line and clearing shows an overbought situation in the stock market. Even though the market indicators are BULLISH, and 21% overvalued, we have to be wondering when all of this upside will stop. I thought 4200 to 4400 on the S&P 500. That is a 2-7% move from here. It can go higher than that, we will see. Earnings are coming out and if they show a clear cut blowout in earnings then the market should continue higher, but we have to keep aware of the overvalued nature of the market.

Chart Source: AIQsystems.com

Support levels

S&P 500 4040, 3919, 3870, 3655.
NASDAQ 13,611, 13,472, 13012.
Dow Jones 33280, 29280
These may be safer areas to get into the equity markets on support levels slowly on the accumulation areas.

THE BOTTOM LINE:

The market continues to look ok albeit very overvalued based on earnings and interest rates. I still think the market could reach my 4200-4400 or higher before the end of the year or higher and the economy should be higher than where we are today. I am worried that interest rates over the next year or so will be higher than 2% on the ten-year bond. Markets usually have a more serious correction if the 10-year bond goes above 2.75% to 3%. We are far from that point. I still like Value stocks for the short term and growth for the mid to long term as growth stocks is where the real growth in the economy should be. The NASDAQ stocks have underperformed for the year but, if you are longer-term investors then have a mix of growth and Value stocks or funds. I have been suggesting a higher percentage of small and midcap value and growth funds over the last 5 months and now the smaller stocks are overvalued and a reduction of smaller stocks may be in order. In addition, the Price to Earnings in the market is over 24 times earnings, this indicates a much-overvalued market. If you are within a year of retirement you may want to take some profits if you made money and wait for a better entry. It all depends on your goals and risk tolerance.

Best to all of you,

Joe Bartosiewicz, CFP®
Investment Advisor Representative

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

If you have any questions, please call me at 860-940-7020.
Joe Bartosiewicz, CFP®
92 High Street
Thomaston, CT 06787 and
7501 East MCDowell RD #2172 Scottsdale, AZ 85257

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 in different 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.

Detecting High-Volume Breakouts

The importable AIQ EDS file based on Markos Katsanos’ article in the April issue of Stocks & Commodities, “Detecting High-Volume Breakouts,” can be obtained on request via email to info@TradersEdgeSystems.com.

Excerpt “Is there anything more satisfying for a trader than capturing a huge breakout? The usual practice for breakout entries is to simply buy new highs. This method, when used in isolation, will often result in false breakouts. It is, therefore, better to wait for volume confirmation before entering the trade, as high-volume breakouts usually last much longer. In this article, I will show you how to detect breakouts using only volume, sometimes even before price breaks out, by introducing a new volume breakout indicator. “

The code is also available here:

 
!Detecting High-Volume Breakouts !Author: Markos Katsanos, TASC April 2021 !Coded by: Richard Denning, 02/18/2021
!INPUTS:
period is 30.
smoLen is 3.
vpnCrit is 10.
maLen is 30.
V is [volume].

!FORMULAS:
MAVol is simpleavg(V,period).
MAV is iff(MAVol>0,MAVol,1).
Avg is ([High]+[Low]+[Close])/3.
MF is Avg - valresult(Avg,1).
ATR is simpleavg(max( [high]-[low],max(val([close],1)-[low],[high]-val([close],1))),period).
MC is 0.1*ATR.
VMP is iff(MF > MC, V, 0).
VP is sum(VMP,period).
VMN is iff(MF < -MC, V, 0).
VN is sum(VMN,period).
VPN is (expavg(((VP - VN) / MAV / period),smoLen))*100.
MAVPN is simpleavg(VPN,maLen).

Code for the VPN indicator is set up in the AIQ code file. Figure 9 shows the indicator on a chart of Tesla Motors Inc (TSLA).

Sample Chart

FIGURE 9: AIQ. The VPN indicator is shown on a chart of Tesla Motors Inc. (TSLA).

—Richard Denning
info@TradersEdgeSystems.com
for AIQ Systems

New updated Market Chart Ticker

With the price of the Dow Jones 30 (ticker INDU) in your AIQ reaching beyond 32760,  your Market Chart may be experiencing a spike in Charts. A new updated file for INDU is now available for you at www.aiqsystems.com/INDU.dta

Close all open AIQ programs.  Click the link above and Save INDU.dta to c:\wintes32\tdata, say yes when asked to overwrite.  Once done, open Data Manager, click on Utilities, Rebuild Master Ticker List.

If have any questions please contact Support support@aiqsystems.com

TECH NOTE

The error is due to the theoretical maximum length of an environment variable is around 32,760 characters.

Trend Strength: Measuring The Duration Of A Trend

The importable AIQ EDS file based on Richard Poster’s article in February 2021 issue, of Stocks & Commodities “Trend Strength: Measuring The Duration Of A Trend,” Getting a good reading on trend strength is an important and useful metric to have when trading. Here, we introduce a new technique that makes use of a less common approach to measuring the strength of a trend… can be obtained on request via email to info@TradersEdgeSystems.com. The code is also shown here:

!Trend Strength: Measuring The Duratioin of A Trend !Author: Richard Poster, TASC Feb 2021 
!Coded by: Richard Denning 12/12/2020
!INPUTS:
TPRlen is 20.
SMAlen is 5.
ThrshFixed is 1.0.
MULT is 10.
C is [close]. _point is 0.01.

!FORMULAS:
sma1 is simpleavg(C,SMAlen,0).
sma2 is simpleavg(C,SMAlen,1).
smadiff is (sma1 - sma2)/(MULT*_point).
up if smadiff>ThrshFixed.
dn if smadiff<-ThrshFixed.
countP is countof(up,TPRlen).
countM is countof(dn,TPRlen).
tpr is abs(100*(countP-countM)/TPRlen).
ListValues if 1.

Code for the TPR indicator is set up in the AIQ code file for stocks with point value equal to 0.01. Figure 7 shows the indicator on a chart of Apple Inc. (AAPL).

Sample Chart
FIGURE 7: AIQ. The TPR indicator is shown on a chart of Apple Inc. (AAPL).

—Richard Denning
info@TradersEdgeSystems.com
for AIQ Systems

The Bartometer

March 8, 2021

Hello Everyone,

Over the last few weeks the markets have drifted lower with the NASDAQ actually negative for the year. The rest of the non tech sectors have performed relatively well as seen on the chart below. As investors are looking for continual growth in the overall economy—the sectors impacted hardest by Covid have started to bounce back. Cruise ships, manufacturing, and airline stocks are all seeing short term gains strengthened by the stimulus plan, increase in Covid vaccination distribution, and hope of future increased earnings. The large cap growth stocks like Apple, Amazon, Tesla, and Microsoft have flattened over the last 8 months. The small to mid-cap stocks, energy, and financials have kept the market upright and are still reasonable to be invested in with proper allocation. Energy stocks however, may continue to perform relatively well over the short term, longer term I don’t see a lot of growth as President Biden and the other nations strive to eliminate the need for fossil fuels replacing them with electric, solar, and alternate ways of generating power. In addition, financial stocks also have been doing well and should continue to perform as long as the economy is doing well and interest rates are rising. Even though the market is about 13% overvalued and in the short term could fall; the economy should rise throughout the rest of the year giving us a decent buying opportunity if the market falls. Interest rates should still push higher over the longer term, but short term the interest rate rise may stall growth.

Some of the INDEXES of the markets both equities and interest rates are below. The source is Morningstar.com up until March 07, 2021.

YTD
Dow Jones +3.33%
S&P 500 +2.61%
EQUAL WEIGHTED S&P 500 +4.7%
NASDAQ Aggressive growth -1.61%
Large Cap Value +7.0%
I Shares Russell 2000 ETF (IWM) Small cap +11.05%
Midcap stock funds +7.52%
International Index (MSCI – EAFE ex USA +2.5%
International Emerging Markets +4%
Financial stocks +14%
Energy stocks +39%
Healthcare Stocks -1.0%

Moderate Mutual Fund Investment Grade Bonds (AAA) Long duration +.5%
High Yield Merrill Lynch High Yield Index +0.2%

Floating Rate Bond Funds +1.4%
Short Term Bond +.2%
Multi sector bond funds -.4%

Gold -11%

10 year Bond Yield 1.62%

As you can see above, the NASDAQ and the tech stocks, the leader over the last year is down for the year. They may be down, but don’t count them out. That sector is the growth engine of the world. They just need a rest short term.

Classicalprinciples.com and Robert Genetskis Excerpts

Market Outlook

Stock prices moved decisively lower this past week as all 5 key indexes lost ground. The Nasdaq and QQQs fell 3% bringing both indexes to 10% below their recent highs. Other indexes fell 1%-2½%.

In his analysis a month ago, my technical guru, Joe Bartosiewicz CFP, warned of potential problems due to a technical formation. Stocks have already gone through some of Joe’s support areas with the S&P500 below its 50-day average. His latest key levels for support are the 12,500 vicinity for the Nasdaq and 3671 for the S&P500.

Economic news remains mostly positive. Investors now appear concerned over too strong a recovery, higher inflation and increases in longer-term interest rates.

Current policies aren’t helping. Both Fed Chairman Powell’s insistence on further monetary ease and the pork-loaded $1.9 trillion “stimulus” bill are feeding concerns over higher inflation.

At yesterday’s close, the S&P500 was overvalued by 13%. As a result, stocks are still vulnerable to further declines. I continue to expect the Fed’s monetary ease to provide a tailwind for stocks to keep the S&P500 above its fundamental value. However, when psychology turns negative, there is no way to know how far a correction will go.

As for longer-term interest rates, they remain well below their fundamental level. We are at the beginning of what I expect will be a major upward move in long-term rates. Fixed-income portfolios should remain very defensive.

A Look Back

Today’s job report shows a gain of 465,000 private jobs in February, 355,000 of these were in leisure and hospitality. In spite of the gains, the number of jobs remains 6% below its peak of a year ago. The good news for jobs is also evident in initial unemployment claims. They averaged 791,000 in February, 50,000 less than the previous two months.

Stock Valuation: S&P 500 13% Overvalued
Economic Fundamentals: Positive
Monetary Policy; Highly Expansive
.
Source: Classical Principles.com

NASDAQ

This is the index that contains Apple, Microsoft, Google, Tesla, and the aggressive tech stocks in general. Last month I said that the markets were overbought and that we had a Rising Wedge pattern. Not only a rising wedge but a Head and Shoulders top, with the neckline at 13015. If the NASDAQ closes above 13315 and stays there for 2 plus days, I will get more positive. Friday, AIQ gave a short term Buy signal on the daily charts. I am not totally convinced yet. I want to see it close above the 50 day moving average, 13315, for a day or two. There is support on the NASDAQ at 12,316(area), 12,104, 11,900, 11,743, 11,618, and 10,801

SK-SD stochastics is now somewhat Oversold, so long term investors may want to nibble here but there could be a lot more on the downside to come as it’s not very oversold.

The Advance Decline line is the number of stocks going up compared to the number of stocks going down on a running total. As you can see to the left, there are a lot of stocks in the NASDAQ that are falling. This year’s rally has been powered by the energy stocks, value and financials. This is why we diversify.

As I see it, interest rates have a lot of internal pressure to rise, meaning long term bonds can continue to get hit, but the economy should continue to get better and that should help stocks in general.

Support levels on the S&P 500 area are 3723, 3694, 3671, 3594, RESISTANCE on the S&P is 3887

NASDAQ Support, 12,214, 11,900, 11,618, and 10,801

Dow Jones 30310, 29782, 29217, and 29017

These may be safer areas to get into the equity markets on support levels slowly on the accumulation areas.

THE BOTTOM LINE:

The market has sold off over the last month, especially the aggressive tech and NASDAQ stocks. Value, energy, and financial stocks continue to rally this year. I still like financial and energy stocks, but not for long term holds as fossil fuels are reduced and even eliminated. Technology should do well over the long term and if the tech sector continues to sell, I will start to buy them myself as long term they are in the sweet spot. The Small Stocks have performed great this year and I think the Covid stocks that were hurt last year, like the restaurants, parks, cruise ships and more will come back as the economy gets stronger. Diversification is now important as the first 10 months of the recovery has been all large growth.

Best to all of you,

Joe Bartosiewicz, CFP®
Investment Advisor Representative

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

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 in different 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.

The Bartometer

February 7, 2021

Hello Everyone,

The stock market again continues its upward trend, but instead of the large stocks powering the markets higher, its been the small caps, up 13% since January 1. Over the last 4 Bartometers, I have been recommending a shift to small and midcap stocks, and they are now performing the best. I still like the small, midcap, and larger companies, but as long as the economy grows, the small and midcap stocks should continue to do relatively well. I am not saying that the larger companies won’t grow, but the market is now 16% overvalued based on interest rates and future projected growth. For the aggressive investor over the long term, I like the Block Chain technology sector, the new internet of things, the autonomous car sector, technology, and biotechnology for the dramatic growth potential ahead. As we come out of the Covid-19 malaise, the airlines, restaurants, amusement parks, cruise ships, real estate, and manufacturing, and more should rebound. I also see the fuel cell technology, international emerging markets, and international in general doing well. My computer models are still on a Hold signal but can change at any time as the market is very overbought,

A year from now, I anticipate the economy will be healthier than the current status. The more robust economy will be in part due to the availability of COVID vaccines from Pfizer, Moderna, and J&J and benefiting other hard-hit companies.

Some of the INDEXES of the markets both equities and interest rates are below. The source is Morningstar.com up until February 07, 2021. These are passive indexes.

Dow Jones
+1.92%
S&P 500
+3.70%
EQUAL WEIGHTED S&P 500
+4.50%
NASDAQ Aggressive growth
+5.62%
Large Cap Value
+3.00%
I Shares Russell 2000 ETF (IWM) (Small-Cap)
+13.05%
Midcap stock funds
+7.52%
International Index (MSCI-EAFE ex USA)
+2.50%
Financial Stocks
+9.00%
Energy Stocks
+10.0%
Healthcare Stocks
+11.0%
Moderate Mutual Funds Investment Grade Bonds (AAA) Long Duration
+2.22%
High Yield Merrill Lynch High Yield Index
+0.30%
Floating Rate Bond
+0.70%
Short-Term Bond
+0.40%
Multi sector bond funds
+0.59%
Gold
-4.70%
10-year Bond Yield
1.00%

Classicalprinicples.com and Robert Genetskis Excerpts

Market Outlook

There was a combination of good news this week adding to the latest euphoria surrounding stocks. Positive news on economic growth, robust earnings reports, a sharp decline in COVID-19 cases, and progress in distributing the vaccine all helped lift stock prices.

The increase lifted the S&P500 back to 16% above its fundamental value. In my upcoming monthly report, we’ll look at how monetary policy has contributed to ending bull markets and highlight some of the early warning signals. At this time monetary policy continues to provide a strong tailwind for stocks. While investors are prone to react to any negative news, the tailwind from monetary policy should continue to limit any downward moves.

During the first half of this year the economy’s momentum should enable it to grow at an annual rate 4% or higher. Growth is likely to slow later this year and into the next year as new policies slow the economy’s upward momentum.

As the chart above shows, long-term interest rates have begun to move higher. Without the Fed’s manipulation, the yield on 10-Treasury Notes would likely be near 4%. As the economy heats up and inflation increases, we face the potential for a major increase in interest rates.

A Look Back

Today’s jobs report shows private industries added a net of only 6,000 jobs in January. There was a loss of 61,000 jobs in leisure and hospitality, an improvement from the loss of 531,000 in December. A sharp rise in government employment led to the gain of 49,000 total jobs.

In spite of the weakness in jobs, ISM business surveys for January show rapid growth in both manufacturing and service companies. Readings were in the high 50s. New orders were even stronger with readings in the low 60s.

Stock Valuation: S&P 500 16% Overvalued
Economic Fundamentals: Positive
Monetary Policy; Highly Expansive
.
Source: Classical Principles.com

NASDAQ

NASDAQ Chart Source: AIQsystems.com

The NASDAQ is above and it contains the stocks like Apple Computer, Amazon, Microsoft, Shopify, Tesla and much more. This is the index that has been the growth engine of the markets over the last 10 years and I believe it should continue to grow over the long term. Short-term there is support at 13,171 to 13,200 right at the bottom Trend-line and the 23.6% Fibonacci Retracement If the NASDAQ breaks and closes BELOW 13171 I will become CAUTIOUS TO VERY CAUTIOUS ON THE MARKET as it is very overvalued at this time. I am however, still relatively Bullish but understand that market direction changes on a dime. If 13,171 breaks there is support at the 12,900 area or the 50-day moving average. If the NASDAQ closes below that Level I will become VERY CAUTIOUS and would expect the NASDAQ to fall to the 12,141 area. So, observance is now important. I am still bullish, but I realize the markets are now Very Overvalued.

Momentum is still positive as you can see the pink line above the blue line.

The ADVANCE – DECLINE Line is next. It shows the number of stocks going up as compared to the number of stocks going down on a running total and you can see it still looks relatively positive

On-Balance Volume is the last chart. This is confirming the upside as well and not showing any divergence or non- confirmation. It is confirming the upside as it is at a new high and so is the NASDAQ. Please call me at 860-940-7020 with questions.

S&P 500

S&P 500 Chart Source: AIQsystems.com

The S&P 500 is above. The S&P is now at a new high as it continues to go up in value. As the market continues to rise in anticipation of the economy rebounding it is perplexing many people on WHY it is rising so much. It is because earnings are coming in better than expected. Also, the market anticipates 6-9 months AHEAD of time. They think that by September the economy should be on its way to recovery. There is pattern above that I have mentioned before, and it is called A RISING WEDGE PATTERN.

A RISING WEDGE PATTERN is a Negative or a Bearish pattern. It rises up ward and goes to an APEX. This pattern rises on low volume and eventually breaks on the upside if it fails or the DOWNSIDE if it is a true Rising Wedge. This pattern now has to be watched and possibly act upon it if 371.2 on the SPY (S&P 500) tracking stock or 372.6 which is the 23.6% Fibonaccis level on the S&P. On the TRUE S&P 500 it’s 3744. So one is the SPY and one is the S&P. This is strange, the 50 day Moving average, the S&P Trend Line and the 23.6% Fibonacci Level is between 371 to 373 on the SPY or 3742 to 3744 on the S&P 500.This is extremely important to watch at this time as if they break and close below all 3 support levels, it could cause traders to SELL. I will be looking at these levels very keenly and will become VERY CAUTIOUS if they BREAK and CLOSE below those levels.

Momentum is the next chart and it shows that the market is getting a little tired.

Volume is the next indicator, and although volume is still relatively good, it is slowly declining on up days.

On-balance Volume is relatively good. So I will be watching these 3 major support levels to determine if the Market is in a SHORT TERM TOPPING ZONE. Call me to review your accounts.

Support levels on the S&P 500 area are 3743 to 3745 AREA, 3630, 3554, 3476 and 3225.
NASDAQ Support, 13758, 13567, 13171 (EXTREMELY IMPORTANT), 12721, 12358, and 12109.
Dow Jones 30681, 29559, 29215, 28018, 28482, and 27100
These may be safer areas to get into the equity markets on support levels slowly on the accumulation areas.

THE BOTTOM LINE:

The market has continued nicely over the last month mainly because of earnings of companies beating expectations and a recognition that the economy will eventually return to a growth pattern. The market looks to continue to grow and as the economy comes out of its recession, the small and midcap stocks as well as the large stocks could continue upward, BUT, the markets are forming a BEARISH RISING WEDGE and if 3743-3745 is broken and the S&P closes below the trend-line over the next few days or 2 weeks, I will get VERY CAUTIOUS. The Small Stocks have performed the best this year but starting to get a little tired. I am bullish over the long term but realize the markets have come so far, so fast. It may be time to reallocate money from stocks to a fixed account or other allocations to a more normalized allocation. Diversification is now important as the first 8 months of the recovery has been all large growth.

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.

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 in different 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.