Many of you may know me, I’m Steve Hill and I’m CEO of AIQ Systems. We’ve provided high end trading analysis tools for over 35 years. My good friend and, client for over 20 years, multi-millionaire investor, Darren Winters is holding a Crypto investing training session this Thursday October 14, 2021 1:30 PM – 2:45 PM EDT
1) The 6 criteria to look for when deciding which crypto to invest in
2) What could be the best performing investments this year
3) The process of how to buy for beginners and advanced investors
4) Why today, there is still massive potential in this market
He’ll also be talking about what he thinks could be one of the biggest crypto launches this year and how to get in early.
If you’re like me, and you’re still working on getting up to speed with how this burgeoning market works, Darren’s training is truly eye opening. Best of all it’s free.
Also you can forward this post to any friends / colleagues / relatives who you think would be interested.
It’s going to be a very valuable session, so they’ll be thanking you for it – plus you’ll have someone to share your thoughts with.
Just make sure you logon 5 minutes early as we might fill to capacity again!
Back in August I stated that the August through October time horizon is the season the stock market tends not to do well and it did just that. But now October is here and seasonal pressure is now to the upside starting in the 2-4th week of October. Does this mean the correction is over? Not at all. It just means that seasonal trends are higher through the end of the year and into January. Earnings and interest rates control the direction of the stock market over the long term. Currently the interest rate market is rising, bonds are declining, and stocks have bounced a little since Oct 1st, but still below its 50 day moving average. So I will not get Bullish until the S&P closes above 50 day moving average and stays there for 2-3 days. Up until then I am still short term Cautious.
If earnings control the direction of the stock markets over the long term then where are earnings expected to go? Earnings still are coming out better than expectations and interest rates should stay low for a while longer so any decline in the markets allow us to buy cheaper shares to redeem over the longer term. Below is the S&P 500 earnings growth chart.
S&P 500 Earnings Growth Chart
Source: S&P
83% percent of companies reporting earnings are beating their expectations. Over the last year earnings have risen 13.95% and are expected to continue to grow approximately 10.8% over the next year. If this happens and interest rates stay relatively low then markets tend to follow earnings over the long term. There are caveats that may disrupt this somewhat:
Covid-19 escalation as we are headed into the winter months
China problems, inflationary pressure, job growth reduction and more.
This is why financial planning is not a static process and needs to be looked at on a regular basis. A diversified portfolio in different asset classes may protect you somewhat. If interest rates are rising, then floating rate bonds that must pay more as interest rates rise may be better than regular bond funds. Financial stocks tend to do better when interest rates rise because their profits rise. If there are inflationary pressures then the typical investments that tend to benefit are ones that people should consider are metals, oil, real estate, inflation protected bonds, agricultural commodities etc.
Listed below are some of the INDEXES for both the equities and interest rate markets. The source is Morningstar.com up until October 9, 2021, these are passive indexes.
Dow Jones +15% S&P 500 +18.1% EQUAL WEIGHTED S&P 500 +21.3% NASDAQ Aggressive growth +15.1% Large Cap Value +15.0% I Shares Russell 2000 ETF (IWM) Small cap +13.2% Midcap stock funds +17% International Index (MSCI – EAFE ex USA +9% International Emerging Markets -1.22% Financial stocks +32% Energy stocks +53% Healthcare Stocks +13% High Yield Merrill Lynch High Yield Index +2.4% Short Term Bond +.12% Multi sector bond funds +2.1% Gold -7.92% 10 year Bond Yield 1.6% Moderate Fund +8.4% Average Disruptor Fund Aggressive growth -11%
Market Outlook
Stocks rebounded this past week with gains of 1% to 3%. The Nasdaq and QQQs were at the low end of this range while the S&P500, Dow and small caps were at the upper end.
While the rebound in stock prices is encouraging, most stock indexes remain below their 50-day averages with 10-day averages below the 50-day averages. Hence, technical (psychological) indicators remain negative.
The economic news this week came in better than I had expected. While advanced Markit business surveys suggested the economy was slowing, ISM business surveys pointed to continued strength. Markit also revised its advance September data to show stronger growth among service companies. On balance, the business surveys show September business activity remained strong
Businesses also reported near-record increases in prices in September. Concern over inflation is one of the clear forces putting upward pressure on interest rates. The yield on 10-year T-Notes is up 30 basis points since mid-September.
When interest rates surge as they have done in recent weeks, there is often a leveling off period. In spite of any potential leveling off, the upward pressure on rates should continue. As for stocks, the most likely outlook is for relatively stability before resuming their upward drift.
A Look Back
Today’s September employment report shows the economy remained strong last month. Private sector payroll jobs increased by 317,000, a 3% annual rate. Weekly hours worked and average hourly earnings rose at a 6% and 7% annual rates, respectively.
Economic Fundamentals: neutral
Stock Valuation: S&P500 over-valued 25%
Monetary Policy: expansive
Recommended Stock Exposure: 85%
CHART SOURCE:AIQSYSTEMS.COM
The S&P 500 is above. In August and September I went over the technical indicators and they were VERY OVERBOUGHT and I expected a 3-6% correction. The S&P 500 fell about 6% from its high. Now, it’s a different story, the markets are OVERSOLD, meaning it may be a better BUY. Seasonally the market is still in a weak time through October and could still fall as the S&P is still below its 10 and 50 day moving average. See the 10 day in red and the 50 day in green. We need to see the S&P 500 close above the 50 day moving average at the current price of 4430 in green and stay there for a few days for me to get bullish again. Current my AIQ computer models and other technical indicators are very oversold and any good news can drive this markets higher.
The next indicator is the MACD or momentum indicator. Since September it has trended downward. Now, the pink line is about to break out and through the green line and that would be a bullish trend break.
The next indicator is the SD-SK Stochastics indicator. It is an overbought or oversold indicator. In August and September I was saying that the market was overbought and should go down. Any price above 88 is overbought. Now that it is under 32, it’s somewhat over sold. This may be a good time for longer term investors to start to accumulate equities.
The last indicator is the stochastic indicator. A sell indicator is when it falls below 80 and the buy indicator is when it crosses 20 and it did a few days ago. We are not out of the woods yet, but the markets look a little better to enter then they did 2 months ago.
Support levels on the S&P 500 area are 4365, 4237, and 4044 Resistance at 4438. These may be safer areas to get into the equity on support levels slowly on the accumulation areas.
THE BOTTOM LINE:
Seasonally the markets are getting over its seasonal weakness between now and the end of October, and my computer models are starting to give Buy signals. But the S&P 500 needs to close above its 50 day moving average and stay there for a few days to set a new bottom. So over the next couple of weeks you may want to dollar cost average a little money into the markets and more if it breaks out above its 50 day moving average Caution is still key however.
Best to all of you, Joe Joe Bartosiewicz, CFP® Investment Advisor Representative
Disclaimer
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 importable AIQ EDS file based on John Ehlers’ article in the October issue of Stocks & Commodities, “Cycle/Trend Analysis And The MAD Indicator,” can be obtained on request via email to info@TradersEdgeSystems.com.
John Ehler introduces the moving average difference (MAD) indicator where the moving average lengths are different by approximately half the period of the dominant cycle in the data.
The code is also available below. Code for the author’s indicator is set up in the AIQ code file.
!CYCLE/TREND ANALYTICS AND THE MAD INDICATOR
!Author: John F. Ehlers, TASC Oct 2021
!Coded by: Richard Denning, 8/15/2021
!MAD (Moving Average Difference) Indicator
!(C) 2021 John F. Ehler
Shortlength is 8.
LongLength is 23.
MAD is 100*(simpleavg([Close], ShortLength) -
simpleavg([Close], LongLength)) /
simpleavg([Close], LongLength).
Figure 9 shows the MAD indicator on a chart of Tesla, Inc. (TSLA).
FIGURE 9: AIQ. This shows a chart of Tesla, Inc. with the MAD indicator applied.
I hope you all had a great summer and did some of the things you wanted after a long period with Covid. I am confident that our lives with get to some semblance of normalcy soon.
The market is now in the seasonally weak period of the year and I expect a continued short term volatility in the market. September is usually a volatile time of the year with October bottoming. November through January is usually a seasonally strong period. The Dow Jones has closed below the 50 day moving average a negative indication in the market. The S&P 500 sold off Friday and it is once again at the bottom of the trend line. My AIQ models are on a short term sell signal over the last 2 weeks and the Dow Jones support level is broken. Any close below 4413 on the S&P will get me Very Cautious on the market and short term there could be a break in the trendline pattern and start a correction in the market. Long Term I am very bullish but Short term traders get in and out of this market very quickly. They shift money in herds, buying and selling with large pools of money creating short term spikes in volatility. Long term investors need to stay the course and right now Volatility can cause declines in the portfolio. If you are over the age of 60 or nearing or in retirement I would reduce equities by 5-10%% if you are concerned about short term potential volatility that may happen. The markets are now 29% overvalued.
Earnings are still coming out better than expectations and interest rates should stay low for a while longer so any decline in the markets allow us to buy cheaper shares to redeem over the longer term. Expect Volatility.
Listed below are some of the INDEXES for both the equities and interest rate markets.
Dow Jones +14.58% S&P 500 +19.6% EQUAL WEIGHTED S&P 500 +21.65% NASDAQ Aggressive growth +20% Large Cap Value +18% I Shares Russell 2000 ETF (IWM) Small cap +13.4% Midcap stock funds +17% International Index (MSCI – EAFE ex USA +10% International Emerging Markets +2% Financial stocks +28% Energy stocks +28% Healthcare Stocks +17%
Moderate Mutual Fund Investment Grade Bonds (AAA) Long duration -2.5% High Yield Merrill Lynch High Yield Index +3.5%
Floating Rate Bond Funds +3.51% Short Term Bond +.9% Multi sector bond funds +2.9%
Gold -6.3%
10 year Bond Yield 1.23%
Moderate Fund +8.7%
Average Disruptor Fund Aggressive growth -2%
Dr. Robert Genetskis Economic Excerpts
Market Outlook
The market continues to ignore the Delta variant, supply-side constraints and the debacle in exiting Afghanistan. None of these potential headwinds were able to withstand the Fed Chairman’s assurance there would be no hike in interest rates until after next year’s election.
Chairman Powell said inflation is under control. He also indicated rising prices were the result of almost anything but the Fed pouring more money into the economy.
This is typical Fed speak. The Fed creates money with abandon, takes credit for a booming economy, then blames inflation on everything else. It’s called “modern monetary theory,” but it’s as old as money itself. Based on early business surveys, I had expected some of the economic news for August would show brief signs of a slowdown. However, the ISM survey for manufacturing indicates business was strong and new orders are signaling further strength.
The S&P500 is now 29% above its fundamental value. So far, the Fed’s monetary explosion is carrying stocks well above their fundamental value. So long as the Fed is able to keep interest rates well below their normal levels, stock prices will remain elevated.
A Look Back
August’s report shows only 243,000 private sector payroll jobs were added in August, well below the 800,000 additions in June and July. The smaller job gains are consistent with business surveys showing little or no job gains. The amazing thing is businesses are still rapidly expanding output in spite of employing 3½% fewer workers than at the pre-Covid peak. Economic Fundamentals: positive Stock Valuation: S&P500 over-valued 29% Monetary Policy: expansive Recommended Stock Exposure: 85%
The S&P 500
The S&P 500 is above. If you look you can see that the S&P has broken the trend-line (negative) and is approaching its 50 day moving average. This is short term negative and I will get VERY Cautious if it breaks the 4413 level on a close. The Dow Jones Average closed below its 50 day moving average. This is why I am getting Cautious and believe some of you should be taking profits and or rebalancing if you have too much money in the stock market. September is usually a volatile month, but any decline of significance and I will get Bullish as I believe a major selloff would could be a major Buy if you are a long term investors. If you are trading stocks, then I would make sure your companies are solid with great earnings, revenues and balance sheets. Call me with questions but right now I am Cautious to possibly Very Cautious if 50 day moving average is broken on a close.
The graph under the price chart is Momentum and as you can see the pink line closed below the blue line, a negative.
The next chart is Stochastics. This shows over bought and oversold indexes. Sell signals are given when the Stochastics breaks below the 80 as it is showing now.
On Balance Volume is trending lower. This shows higher volume on sell offs. This is a negative.
CHART SOURCE: AIQ SYSTEMS.COM
Support levels on the S&P 500 area are 4413, 4224, 4010, and 4000. These may be safer areas to get into the equity on support levels slowly on the accumulation areas.
THE BOTTOM LINE:
Long term I am Bullish but over the VERY SHORT TERM I am getting Cautious to Very Cautious. As I stated last month, The August to October season tends to be seasonally weak and September tends to be the worst. The market is 29% overvalued, we are on short term sell signals and the Dow Jones has broken below its trend-line and its 50 day moving average. The NASDAQ looks ok but if the S&P 500 closes below it 50 day moving average over the next few days it can easily drop another 3-6% to the 4222 next level. If that breaks then the next level is its 200 moving average currently at 4090.
Best to all of you, Joe Bartosiewicz, CFP® Investment Advisor Representative
92 High Street Thomaston, CT 06787
Securities and advisory services are 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.
The importable AIQ EDS file based on Vitali Apirine’s two-part article, (“Moving Average Bands,” part 1, July 2021 issue, and “Moving Average Band Width,” part 2, August 2021 issue) in Stocks & Commodities magazine can be obtained on request via email to info@TradersEdgeSystems.com. The code is also shown below.
Vitali presents moving average bands (MAB), an indicator based on the distance between the bands. MAB width lines can foreshadow strong market moves or a change in trend…
!Moving Average Bands !Moving Average Band Width !Author: Vitali Aprine, TASC July & Aug 2021 !Coded by: Richard Denning, 6/14/2021 !INPUTS: Len1 is 50. Len2 is 10. Mult1 is 1. C is [close]. MA1 is expavg(C,Len1). MA2 is expavg(C,Len2). MAdiff is MA1 - MA2. DV is sum(MAdiff*MAdiff,Len2) / Len2. Dev is sqrt(DV)*Mult1. MABup is MA1 + Dev. MABmid is MA1. MABdn is MA1 - Dev. MABW is (MABup - MABdn) / MABmid * 100. LowMABW is lowresult(MABW,Len1).
Figure 13 shows the MAB and MABW indicators on a chart of Apple, Inc. (AAPL).
FIGURE 13: AIQ. This shows the MAB and MABW indicators on a chart of Apple, Inc. (AAPL).
The markets continue to rise to the 4420 level and surpassing the target of 4400 I had for the S&P 500. Earnings are coming in better than expectations for the most part and stocks are following earnings.
There are two things that make stocks rise, Earnings and Interest rates:
• If earnings are rising faster than expectations and rising 5-10%+ per year, then the markets should follow the rise in earnings, because the value of the company is based on what it earns over time.
• If interest rates stay low, then companies and consumers can borrow money at a low rate and invest. In addition, low interest rates let people afford houses and other larger purchases. With lower interest rates there is minimal competition for any other type of investment, like CD’s or money funds attracting people to them. There are few choices, that it why stocks are one of the only choices in which to invest. When interest rates rise to the 3 to 5% there is more competition away from stocks and more towards higher fixed rate bonds, CD’s, and money funds. Now that interest rates for the 10 year bond is 1.15% and money market rates are 0 to .5 of 1% people gravitate toward the stock market and real estate. That is the one of the main reasons the markets are high and could stay high as long as earnings grow, and interest rates stay relatively low. Over time the equity market continues to grow as earnings grow. THINK LONG TERM!
Seasonally and historically, August to October are not good times for the markets. August has been a time where the markets have “Topped Out” and start a decline toward a low in October. “Throughout the month of July, investors had been singing ‘Summertime, and the livin’ is easy,'” with the S&P 500 posting seven all-time highs, Sam Stovall, chief investment strategist at CFRA, wrote in a Monday note. “Unfortunately,” he added, the month of August “has a reputation for disappointing investors. “He notes that since 1945, “the S&P 500 posted its third-worst average monthly return, and third most volatile performance, in August. To make matters worse, while the S&P 500 was higher 55% of the time in August, that batting average fell to only 35% following the 23 years in which the S&P set one or more new highs in July. And to add insult to injury, following the 13 Julys that set six or more new all-time highs, the S&P 500 declined an average 2.4% in August, and fell in price 12 of 13 times.”
Source: Fortune
Dr. Robert Genetski’s excerpts from ClassicalPrinciples.com
Market Outlook
Stocks moved broadly higher for the second straight week with all major indexes hitting all-time highs. Small caps also advanced, but remain 4%- 5% below their highs.
Stocks keep moving higher, behaving like the little engine that could. They are reaching a point above their 50-day average which often leads to at least a short-term correction. However, unprecedented monetary ease should continue to limit any downward correction.
Business surveys show July business activity continued to increase at a rapid rate. This raises the odds total spending (GDP) will grow at double-digit annual rates for the third consecutive quarter.
Investors ignored concerns surrounding Covid. As with the flu, Covid and its offspring variants will be with us for a while. Recent data from the US, Israel and the UK suggest the vaccine is not working as well as expected. Moderna appears to confirm this by announcing vaccinated people might need a booster after six months. Chaching!
The good news is the Association of American Physicians & Surgeons (AAPS) have very treatments for Covid, if begun in the early stages.
Unfortunately, the CDC, NIH continue to ignore the AAPS advice. They claim their job is to advise on limiting the spread of the disease, not providing medical advice.
In spite of the potential for a setback in stocks, equity portfolios should continue to maintain a relatively large percentage of stocks. With historically low interest rates, stocks remain very attractive.
A Look Back Today’s employment report shows July private payrolls rose by 703,000. In spite of the surge in jobs over the past six months, payrolls remain 4% below their pre-Covid peaks. The increase in jobs helped drive the unemployment rate down to 5.4%.
Listed below are some of the INDEXES for both the equities and interest rate markets. The source is Morningstar.com
Dow Jones +16.16% S&P 500 +19.1% EQUAL WEIGHTED S&P 500 +17.2% NASDAQ Aggressive growth +16% Large Cap Value +16% I Shares Russell 2000 ETF (IWM) Small cap +14% Midcap stock funds +17% International Index (MSCI – EAFE ex USA +9.4% International Emerging Markets +.90% Financial stocks +29% Energy stocks +33% Healthcare Stocks +17% High Yield Merrill Lynch High Yield Index +2.5% Gold -5.2%
CHART SOURCE:AIQSYSTEMS.COM
Above is the S&P 500. As you can see, it continues to rise on a Left to Right Pattern. Last month I said if it drops below the trend-line and the 50-day moving average on a close I would get very cautious. It went right to the 5o day moving average 30 minutes prior to the close and rallied 150 points to close nicely above the 50 day moving average and the trend-line. See the arrow My computer models are still flashing Sell signals which have not been confirmed, so this is a watch and wait and realize I might sell for many of you where I am the Fiduciary on the account. August to September is usually a tough time for the market.
If the trend-line or the 50-day moving average is broken on the close I will again become very cautious.
The chart below the market is money flow and that looks good. It shows that money is still going into the market
The next chart shows that the volume as the market is rising is going up on low volume. That is not great.
The chart on the bottom is called “On Balance Volume” and it confirms the upside of the market index if it were hitting a new high like the market has. As you can see it is not doing that as of Friday. So this is a Caution.
Overall, we could have a little correction from now till October. Watch the trend-lines and the 50 day moving average for a break on the close of the day.
Support levels on the S&P 500 area are 4370, 4315, 4300, and 4256. These may be safer areas to get into the equity 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 and August through October are seasonally weak for the market. My target of 4400 on the S&P 500 is pierced on the upside. At this point it could correct very soon then rally to the 4500+ by the end of the year after a little setback. The Value sector of the market and the mid and large value sectors are now fairly valued. Over the longer term, technology, up about 16% should perform the best. Trendlines are very important. At this point, I would not want to see the level broken convincingly on a close. That would make me get very cautious. Best to all of you,
Joe Bartosiewicz, CFP®
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
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.
AIQ TradingExpert Pro includes a Portfolio Manager that allows you to apply exit strategies to your open position, manage and balance your portfolio, and run analysis against benchmark indices.
Included in the Portfolio Manager is the Simulator tool where you can take a trading strategy and test it in real-life simulation. Once you’ve found a strategy that meets your goals, the Pick-of-the-day tool will tell you each day which stocks meet your strategy rule for trading.
“AIQ offers the ability to do a quick review of portfolios on demand is extremely helpful in managing stock portfolio’s – getting trading signals each day provides a great tool to get in front of opportunities or future problems. AIQ provides an ideal tracking system to manage assets; and that is why I have been a subscriber for 25 years. “Patrick Buffa
On my Bartometer in December, I thought the S&P 500 would reach 4200 to 4400 this year. The S&P is now at 4369. Am I worried that we are getting close to my target? Yes and no. Yes, if the Covid 19 Delta Variant starts to progress and yes IF the market breaks below a 10-month trend-line. Otherwise, I am still relatively bullish on the market that can continue higher as earnings continue to come in better than expectations. One Caution, my computer models again flashed a Daily, Short term SELL signal that is not confirmed. That means to watch the trendlines for a break to see if it confirms on the downside.
The stock markets continue to edge higher, confounding many analysts, and logically the market should not be higher now than it was when the economy was booming in 2019. The markets are defying logic and normal metrics of price to earnings and other metrics of valuation as it sees more growth ahead. The market usually rises over the long term based on Earnings and Interest Rates and now Earnings are great, and Interest Rates are low. This is a perfect scenario for the stock market. The valuation of the stock market is that it is 25% over valued, but earnings are coming in better than expectations, so targets are being raised higher. The Federal Reserve is also injecting liquidity and keeping rates low.
The fundamentals of the economy are good, although slowing slightly. I am still relatively positive unless 4200 to 4224 on the S&P doesn’t hold and we have a decisive Selloff. See the graph and explanation on third page.
House prices continue to inch higher. In my opinion, the real estate market will inch higher until the economy slows, or interest rates go over 3.5% on the 15 year and 3.9% on the 30 year. Right now, it still is a Sellers’ market, this soon will slow.
The energy market still looks good, as noticed by the gas prices and if interest rates rise soon then the financial sector which sold off over the last couple of weeks should turn around to the upside. 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 +14.99% S&P 500 +17.1% EQUAL WEIGHTED S&P 500 +16% NASDAQ Aggressive growth +15% Large Cap Value +14% I Shares Russell 2000 ETF (IWM) Small cap +15% Midcap stock funds +15% International Index (MSCI – EAFE ex USA +9.4% International Emerging Markets +7.5% Financial stocks +25% Energy stocks +42% Healthcare Stocks +14% 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 -5.2%
10 year Bond Yield 1.3 Moderate Fund +8.7%
Average Disruptor Fund Aggressive growth -2%
Moderate Mutual Fund Investment Grade Bonds (AAA) Long duration -1.86%
Classicalprinciples.com and Robert Genetskis Excerpts
Market Outlook
Stock prices were mixed this past week. The Nasdaq 100 hit an all-time high Wednesday, fell 1⁄2% yesterday and ended the week up just over 1%. The Nasdaq was up slightly and the S&P500 and Dow were down slightly. Small caps lost 4%.
Good news on the economy continued. June business surveys show both manufacturing and service companies growing rapidly. Weekly employment data show the job market improving.
Monetary policy remains expansive. Monthly data from the Fed show the central bank purchased $172 billion in securities in June. How expansive will depend on how much of the new money banks have left at the Fed. That bank data won’t be released until later this month.
The economy has a lot of momentum. Strong surveys for new orders indicate rapid growth will continue at least through the summer and fall. Longer-term interest rates continue to behave as if inflation will not be a problem. The 10-year Treasury Note is down to 1.29%. In real terms, bonds provide significant negative returns.
Long-term interest rates remain well below their fundamental levels. As inflation becomes more apparent, the risk of holding longer-term bonds will also become more apparent.
A Look Back
The ISM business survey for service companies followed the Markit survey. Both surveys show service company activity remained strong in June, but not as strong as May’s hectic readings. With service business activity at 60 and new orders at 62, the service sector remains healthy.
As with manufacturing companies, the indicator for employment in the service sector was close to breakeven. The weakness in job growth from the business surveys is not consistent with the large increase in jobs from the payroll data.
The S&P 500 is above. As you can see the index continues to rise in a nice channel pattern. Some may say it is a Rising Wedge as well. If you notice, the Trend-line and the 50 day moving average is supporting the upward trend. This means that the longer the trend holds, the more it falls if it breaks the trend. So, in this instance the 4200 to 4224 area or the trendline better hold on a close of the market. I do not want to see the S&P sell off and break the 50 day moving average or the Trend-line decisively. That could cause sellers to finally start selling the rallies and not buy the dips or sell offs.
The next indicator is the MACD or momentum indicator. When the pink line breaks to the upside above the blue line it is positive like now.
The SK-SD Stochastics line is overbought when it is over the 96 like it is now.
The indicator below is the RSI wilder Index. When it is over 70 it is considered overvalued and overbought. It is now.
On Balance Volume is an indicator showing volume and conviction of the move higher. It is not breaking out to new highs, showing me that the market is going up on lower volume.
Overall, the markets are getting flash Sells not confirmed, it means to reduce a little equity and to rebalance and watch the support levels so they are not broken.
Support levels on the S&P 500 area are 4250, 4200, 4050, and 3950. 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 15% should perform the best. Trendlines are very important. At this point, I would not want to see the 4200 to 4224 level broken convincingly on a close. That would make me get very cautious.
Best to all of you,
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.
The importable AIQ EDS file based on Markos Katsanos’ article in July issue of Stocks & Commodities magazine, “Buy & Hold, Or Buy & Sell?” can be obtained on request via email to info@TradersEdgeSystems.com. The code is also available below:
Synopsis….Here is a system that with a few simple rules will reduce drawdown and improve the profitability of your portfolio without having to go short or use put options…
!Buy & Hold, Or Buy & Sell?
!Author: Markos Katsanos, TASC July 2021
!Coded by: Richard Denning, 5/17/2021
C is [close].
C1 is valresult(C,1).
H is [high].
L is [low].
LL3 is lowresult(L,3).
HH3 is highresult(H,3).
LL14 is lowresult(l,14).
HH14 is highresult(H,14).
LL40 is lowresult(L,40).
HH40 is highresult(H,40).
V is [volume].
WilderLen is 2.
ATRlen is WilderLen*2-1.
VIX is TickerUDF("VIX",C).
VIXDN is (VIX/highresult(VIX,15,1)-1)*100.
VIXUP is (VIX/lowresult(VIX,15,1)-1)*100.
VIXDNMIN is -30.
VIXUPMIN is 100.
! AVERAGE TRUE RANGE
HD if hasdatafor(ATRlen+20) >= ATRlen.
TR is Max(H - L,max(abs(C1 - L),abs(C1 - H))).
ATR is iff(HD,expavg(TR,ATRlen),0).
ATRDN is (ATR/highresult(ATR,15,1)-1)*100.
ATRUP is (ATR/lowresult(ATR,15,1)-1)*100.
UP is (highresult(C,2)/lowresult(C,4)-1)*100.
DN is (lowresult(C,2)/highresult(C,4)-1)*100.
CCH is (lowresult(C,10)/highresult(C,100)-1)*100.
HHB is scanany(C=^highresult(C,4),4) then offsettodate(month(),day(),year()).
VOLUP is V/simpleavg(V,50,HHB-1)*100.
LLB is scanany(C=^lowresult(C,4),4) then offsettodate(month(),day(),year()).
SMA10 is simpleavg(C,10).
BUYINITIAL if SMA10 >= valresult(SMA10,1)
AND StochK3 < 40
AND hasdatafor(20)>=10.
B2 if UP > 6
AND (VIXDN<VIXDNMIN OR ATRDN<2*VIXDNMIN)
AND CCH<-15
AND lowresult(StochK40,^LLB)<25
AND lowresult(StochK14,^LLB)<25
AND StochK14>=StochK40.
Buy if BUYINITIAL or B2.
SELL if C<simpleavg(C,20)
AND DN<-6
AND (VIXUP>VIXUPMIN OR ATRUP>2*VIXUPMIN)
AND VOLUP>80 AND highresult(StochK40,^HHB)>85
AND highresult(StochK14,^HHB)>85
AND StochK40>=StochK14.
Stoch3 is (C - LL3) / (HH3 - LL3) * 100.
StochK3 is simpleavg(Stoch3,3).
Stoch14 is (C - LL14) / (HH14 - LL14) * 100.
StochK14 is simpleavg(Stoch14,3).
Stoch40 is (C - LL40) / (HH40 - LL40) * 100.
StochK40 is simpleavg(Stoch40,3).
ShowData if 1.
Figure 7 shows a backtest of the weekly system using the Nasdaq 100 list of stocks from 5/17/1999 to 5/17/2021.
FIGURE 7: AIQ. Shown here is a summary of the EDS weekly backtest using the Nasdaq 100 list of stocks from 5/17/1999 to 5/17/2021.
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.
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.
