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Market Timing zoom recording

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

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

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

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

PLUS register now for the next meet

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

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

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

Market Timing Expert System signals through 1-21-22

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

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

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

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

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

How’d the Santa Claus rally go?

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

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

So how did things go this Santa Claus rally?

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

Bartometer

January 7, 2021

Hello Everyone,

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

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

Earnings and interest rates.

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

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

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

S&P 500

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

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

BOTTOM LINE

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

Joe Bartosiewicz, CFP®
Investment Advisor Representative

92 High Street
Thomaston, CT 06787

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

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

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

Tis the Season to be Cautious

This time of year you might expect us to be thinking about the Santa Claus rally, but after the beating we’ve had the last few days, lets check and see how effective this really is.

What Is a Santa Claus Rally?

I lifted this description from Investopedia

A Santa Claus rally describes a sustained increase in the stock market that occurs in the last week of December through the first two trading days in January. There are numerous explanations for the causes of a Santa Claus rally including tax considerations, a general feeling of optimism and happiness on Wall Street, and the investing of holiday bonuses. Another theory is that some very large institutional investors, a number of which are more sophisticated and pessimistic, tend to go on vacation at this time, leaving the market to retail investors, who tend to be more bullish.

To test this in Expert Design Studio, I used the Seasonality3 ED built-in strategy. I set the Season Length days to 7 days to encompass the last 5 trading days of December and the first 2 days in the New Year.

By setting the date to 1/4/21, the rule looks back 7 trading days from January 4th, each of the last 7 years and gives us an approximate percentage return for each of those 7 days.

Some years with weekends and extra holiday days plus 252 is used as default trading days skew results a small amount. To compensate I also tested 10 trading days back from January 7. The results from the 7 days are below, I tested all the indices in my current database.

INDU is highlighted, this is the Dow 30 index. First it’s clear that in every year except for one, over the last 7 years the Dow has made gains in the Santa Claus period. The average gain Is over 1%. Not too bad for a 7 day trading period. BTW the results from the 10 days from January 7 were similar.

The NASDAQ on the contrary had 3 losing years out of the 7.

So next I decided to look at what ETFs are most likely to have a Santa Claus rally. Here’s the results using the 7 trading days back from Jan 4. This is the ETFs that had gains every year for the last 7.

The first 3 ETFS are all Gold related, the next two are real estate/REITs the last one is a bond fund. Hmm something to keep in mind.

Here’s GLD seasonal charts the right hand side of each year shows the Santa Claus rally clearly. The White line is the average of all 7 years.

Clearly no guarantees what will happen this year, but something to keep in mind.

Bartometer December 4, 2021

Hello Everyone,

As stated on the Bartometer on October 10th we were getting Buy signals, and the market was oversold and a good buy at that time. On November 10th, I noted that the market was too overbought and not to put any substantial money into the market. From that point until now the markets fell 5-10%. This month we have dropped to a point where the market is getting cheaper but not enough to start to invest large amounts of money into the market yet. Dollar cost averaging is fine, but not large amounts of money. There may be a Santa Claus that usually, but not always starts on the 15th of December. With COVID and inflationary problems, this may or may not come to fruition.

What caused the problem when the market is normally in seasonal strength? Omicron, (the new COVID variant), the Federal Reserve tightening money supply, and the market was 34% overvalued that Both Dr. Robert Genetski and I have been saying for months. In addition, the stocks which have been the best performers this year have been the mega large cap stocks like Apple, Microsoft, Google, Energy, Financial and more and the worst stocks have be the Very Aggressive stocks that were up so much last year like Zoom, DocuSign, Shopify etc. Investors, short term, have been more interested in earnings and reasonably valued stocks than stocks with aggressive revenue growth and high valuations. I still like the aggressive stocks but they are more volatile. The market is now overvalued 30% based on earnings and interest rates.

The economy is doing relatively very well and should continue to do so for a while, but next year I can see the economy having a harder time with earnings growth expected to grow 7-9%. Next year I see interest rates rising and the stock market rising 6-9% possibly, but there could be a monkey wrench thrown in the mix if inflation and interest rates rise more dramatically. In light of this I, am looking at BUFFERED ETFs (Exchange Traded Funds) that give the investor a cap on the upside. These are investments that cap the upside of the market, and give you a buffer on the downside. So, for example, if the market goes up 10%, you make 7-8%, but if the market goes down 15%, you don’t lose anything. If the market falls more than 15%, like 20%, you would lose 5%. These are interesting to me now because we again have to look at risk versus reward. What makes these ETF’s of more interest is that these are one year ETF holds.

Energy investments, financial stocks, reasonably valued stocks, technology still look okay for investments and I still like floating rate bonds if the economy is doing well during this period of inflation. Inflation protected bonds also do very well in an inflationary environment. Long term, 5 to 10 years, it’s about artificial intelligence, electric vehicles, technology and more. These are high risk, but high potential growth. In 2022, investors should be looking at more value and growth at a reasonable price.

Listed below are some of the INDEXES for both the equities and interest rate markets. The source is Morningstar.com up until December 4, 2021.

Dow Jones +14.94%
S&P 500 +22.47%
EQUAL WEIGHTED S&P 500 +22.4%
NASDAQ Aggressive growth +22.5%
Large Cap Value +19.75%
I Shares Russell 2000 ETF (IWM) Small cap +10.21%
Midcap stock funds +18.4%
International Index (MSCI – EAFE ex USA +7.22%
International Emerging Markets -4.91%
Financial stocks +30.6%
Energy stocks +50%
Healthcare Stocks +14% Investment Grade Bonds (AAA) Long duration -1.5%
High Yield Merrill Lynch High Yield Index +2.19% Floating Rate Bond Funds +3.77%
Short Term Bond -1.0%
Multi sector bond funds +2.4% Gold -6.58% 10 year Bond Yield 1.34% Moderate Fund +9.0% Average Disruptor Fund Aggressive growth -1 to -37%% big drop last month

Dr. Robert Genetskis Economic Excerpts

Market Outlook

Stocks moved sharply lower this week as popular indexes fell 2½% to 5½%. Large cap indexes were down 3%, while small caps fell 5%.

The main cause appears to be the emergence of Omicron, the latest COVID variant. Research worldwide shows lockdowns to be they are the worst of all responses, both in terms of overall impact on health as well as the economy.

Unfortunately, our health officials have not used either science or logic in dealing with COVID. As a result, there is no telling if they will now behave any differently. The fate of economy and, therefore the stock market, remains in the hands of what has been incompetent policymakers. It’s doubtful we’ll see lockdowns, but predicting their response is difficult.

The good news for stocks is the Fed continued to pour money into the economy in November. This will boost stocks, spending and inflation well into next year.

Although Fed Chair Powell indicated the Fed could halt purchases of securities before mid-year. This policy change is unlikely to slow the Fed’s stimulus.

Technical stock market indicators are more negative than positive. Yesterday, all of the major indexes closed above key resistance levels, which is certainly positive. However, trading volume has been lower on up days and stronger on down days, the opposite is true in strong, healthy markets.

Offsetting pressure from more money sending stock prices higher to concerns over the government

A Look Back Today’s employment report indicated private payrolls increased by 235,000 in November. Even so, the number of jobs remains 2% below its pre- COVID peak. Average hourly earnings rose at a 10% annual rate.
Economic Fundamentals: neutral

Stock Valuation: S&P500 over-valued 3

Economic Fundamentals: neutral

Stock Valuation: S&P500 over-valued 30%

Monetary Policy: expansive

Recommended Stock Exposure: 80%

Above is the S&P 500, the index of the largest blue chip stocks that are based on market value. I have been putting in the short term buy and sell arrows on the chart as you can see on the left. As you can see, there were two Sells in late August, two Buy signals in early October 10th and two Sell signals in mid to late November. On November 10th we were still on BUY–Hold signals but I said do not Buy because the market technicals were too overbought and extended as seen by the indicators above.

The first one was the SK-SD Stochastic chart. Last month I said the SK-SD Stochastic was over 88 and is now too over bought and not said not to buy. On October 10th I said the SK-SD Stochastic was under 32 and the market was cheap and we were giving BUY signals. Now with the selloff we are now getting near the 32 zone again where the market is starting to get over sold and it MIGHT be putting in a BUY zone. We need to analyze every day.

The next chart is the MACD, or Momentum model. This also shows when momentum is topping and turning north or south. When the red crosses above the blue it’s a preliminary BUY, and when it crosses from the upside below the blue line it’s a preliminary Sell. This is one of 15 things I look at to determine a buy or a sell signal.

Stochastics is the last chart and the Buy signal is given when the red line goes above the 20 and the sell is when it crosses above the 80 and that’s what it gave on 11.22.21 on HIGHER volume. We got short term sells on that day. See the red bars.

Now that the S&P is down and you want to know where there might be a short term bottom. Let’s look at where there could be Buying support. The S&P has buying support levels at: 4515, 4460, 4305, (200 day moving average), and 4285, and 4001.

CHART SOURCE: AIQSYSTEMS.COM

Support levels on the S&P 500 area are 4515, 4460, 4305, 4285, and 4001. Resistance is at 4636
NASDAQ support levels are 15,068, 14,857, 14,174 and 13,069
These may be safer areas to get into the equity on support levels slowly on the accumulation areas.

THE BOTTOM LINE:

After the market rallying for most of the year, it sold off hard over the last three weeks, especially the small to mid-cap and the very aggressive stocks. Over the long term, (5 years to 10 years) these stocks exhibit 20- 40% per year revenue growth and are the future, but are very volatile. The market is still in seasonal strength, but the COVID situation and inflation problems are rearing their ugly heads. I like large cap growth as well as small value and financials. Artificial intelligence should be one of the fastest growing sectors over the next 10 years

Best to all of you,
Joe Bartosiewicz, CFP®
Investment Advisor Representative
Contact information:

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
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.


Tis the season to be AIQ – literally

Dear Traders 

Happy Holidays or not given how the Markets tumbled the day after Thanksgiving. BTW, it was also the last full week of November. 

Time for me to run my AIQ seasonal filter on my top 2500 stocks 

The filter is highly configurable and I can select which period of time, looking back from a given date to find a consistent price move up or down. I’m looking for it to repeat every year going back 7 + years. 

I first came across the concept of seasonal consistency through Jay Keppel’s work JayOnTheMarkets.com and his books on Seasonal Stock Market trends. Many of you will have heard of the classic seasonal patterns like ‘Go Away in May’ or “the Santa Claus rally’. My AIQ seasonal screener can find these type of events in individual stocks. Events that happen every year at the same time. 

Here’s how the AIQ Seasonal Screener works 

How long do you usually hold a trade? I like to hold a trade for a month or less, that’s about 22 trading days.. So, I have cash available to invest Monday November 29th. All I need do is pick a date one month from that date and look for stocks that consistently made a profit over those 22 trading days, long or short, every single year going back the last 7 years. You can look back further but 7 seems to be pretty good consistency to me. 

It’s that Simple 

November 29th to December 29th, there were a handful of long stocks with seasonal patterns and the same on the short side. I liked the short side given the current market. 


All these stocks lost money in every December for the last 7 years

I highlighted GRMN and TTEK as both on average lost over 4% in December for last 7 years.


Here’s an AIQ 7 year seasonal chart of TTEK the white line is the average

Here’s an AIQ 7 year seasonal chart of GRMN the white line is the average

Want to go long?

While there were no candidates in my US stocks, there were 3 UK stocks showed up. BRW-LON averaged 9.61% in December over 7 years. That’s impressive.


Here’s an AIQ 7 year seasonal chart of BRW-LON the white line is the average 

Next time I’m going to start to look at the major markets in specific periods and see if we can identify seasonal patterns that are hidden under the radar of everyday noise.

How can I run an AIQ Seasonal scan?

  • First download the scan from our server click here
  • Locate the file Seasonal 3 RD.EDS likely in your /download folder and move it to your /wintes32/EDS Strategies folder
  • Open AIQ EDS from the Main Menu
  • Click File, Open and locate the /wintes32/EDS Strategies/Seasonal 3 RD.EDS file
  • The file is set for seasonal length of 22 days but you can change this to whatever length you wish
  • Remember the date you run the report, like in the example above is 12/31/2020, it looks back in this case 22 days, then it checks 12/31/2019 and looks back 22 days etc. There would be no point it setting the date to run the report to the current date as it would look back 22 days, and you’d have missed the seasonal candidate stocks move.

Try TradingExpert Pro with end of day data for $1

All the powerful features of AIQ TradingExpert Pro end of day are included

  • AI-based Signals Uncover Hidden Trades
  • Time Saving Analysis with Chart Barometer 
  • Every Chart your way with Custom Layouts 
  • Time Saving Power! 200 Screening Reports
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The Bartometer

November 7, 2021

Hello Everyone,

Wow, it was a good month for the stock market. Last month if you read the Bartometer I stated that my computer technical analysis models were giving me BUY signals and that it was a good time to add to equities after I was saying on my August and September Bartometer that the market should fall.

Well, the market went up 6-9% since those signals and your stock side of your asset allocation total should have risen nicely. On the other hand, the bond side actually fell slightly. Where do we go now? Well, the stock market is now 33% overvalued based on earnings and interest rates, but we have tail wind seasonal strength that could push the market higher into the end of the year. Even though the market could continue rising, I don’t see it rising more than 3-5% from here.

The risk is now getting a little high. If your stock allocation is high and you are near or in retirement I would reduce equities somewhat. There are also buffered ETFs (Exchange Traded Funds), that will allow growth on the upside and protection on the downside.

The economy still is doing relatively well and earnings should continue to grow 10+ plus for next year. Where do I think the best sector will be over the next 5 to 10 years? Artificial Intelligence! Right now the entire artificial intelligence market is under $80 billion per year and over the next 10 years many analysts are predicting it could be an $80 Trillion market. This sector could grow more than 42% per year over the next 10 years. There are ETFs and stocks that should benefit from this trend. Other than that I love large cap growth mixed in with small cap value.

Inflation and interest rates are expected to rise over the next year. Bond investments should be kept to a short duration and floating rate bonds that will raise the interest rates should be popular. In addition, financial stocks tend to do better in a rising interest rate environment.

Listed below are some of the INDEXES for both the equities and interest rate markets.
Dow Jones +20%
S&P 500 +26.1%
EQUAL WEIGHTED S&P 500 +27.3%
NASDAQ Aggressive growth +27.1%
Large Cap Value +20.0%
I Shares Russell 2000 ETF (IWM) Small cap +35.2%
Midcap stock funds +27%
International Index (MSCI – EAFE ex USA +9.02%
International Emerging Markets -1.22%
Financial stocks +37.5%
Energy stocks +58%
Healthcare Stocks +18%
Investment Grade Bonds (AAA) Long duration -1.4% High Yield Merrill Lynch High Yield Index +3.63%
Floating Rate Bond Funds +4.02%
Short Term Bond +.67% Multi sector bond funds +2.7%
Gold -4.68%
10 year Bond Yield 1.45%
Moderate Fund +12.4%
Average Disruptor Fund Aggressive growth -1.8%

Dr. Robert Genetski’s Excerpts
Market Outlook

Another week, another series of new highs for stock prices. All the key indexes surged higher this past week. Small cap ETFs led with gains of 4%, the NASDAQ rose 3%, the S&P500 2%, the Dow up 1%.

Once again there was a flurry of good news on the economy, financial front and policy front. For the economy, business surveys from early October indicated healthy growth. Financial markets improved as interest rates declined in the wake of the Fed’s taper announcement.

On the policy front, the election of Republicans to state office in Virginia, a close election in New Jersey and city elections to restore law and order were a clear rejection of woke policies. Look for Democrats to scale back their destructive policy plans or face total defeat in next year’s elections.

For stocks, the latest surge brings the S&P500 to 33% above its fundamental value. The combination of low interest rates and the Fed’s promise to keep them low until at least the middle of next year, point to the potential for additional increases in stocks. However, the higher they go, the greater the risk an abrupt surge in interest rates will lead send them tumbling down.

A Look Back

Today’s employment report shows a strong gain of 604,000 private payroll jobs in October. Moreover, gains in hours worked and in average hourly earnings both increased at annual rates of 4% to 5%.

The employment data are consistent with other reports, all of which show real growth in the economy is increasing at close to a 5% annual rate going into the final months of this year.

S & P 500

The S&P 500 is above. As you can see, the up arrow indicator is where my computer models showed a buy signal on October 10th and the subsequent rally. I am still long term BULLISH on the market, but we are again getting somewhat overbought and the market is 33% overvalued so you need to be a little careful. Any agitation in the economy or political arena could make the market fall.

There is also one thing I want to show you. See where the arrow is putting? That is the extended trend-line where it supported the entire rally over the last year. That trend-line is now at resistance unless it is broken on the upside and the market stays above that line for 2 to 3 days.

So we need to watch either the break on the upside or the topping of the market right where the arrow is pointing. Seasonally the market forces are still to the upside.

next on the chart is the SK-SD Stochastics chart, this shows the level at which the markets are oversold or overbought. Last month it was under 32,
(oversold), now it is overbought (over 88). This means over the 88 level the markets are more overbought compared to when the SK-SD Stochastics was below 32 when it was oversold and more attractive.

The MACD (or Moving Average Convergence Divergence graph) is next. I call it the momentum indicator. Last month, the pink line was about to break out above the aqua line and I said it was oversold and a BUY. Now it has rallied and it’s no longer cheap.

On balance is to the left and it is a powerful indicator. You want to see the indicator breaking out to new highs when the market is and as you can see, the indicator is breaking out to new highs as the market is as well. This is positive. I wish volume were stronger as the market is pushing to highs. This is good, but would like to see it stronger for conviction.

Support levels on the S&P 500 area are 4601, 4563, and 4484 Slight Resistance at 4706
NASDAQ support levels are 15,540, 15400, 15,278 and 14,857
These may be safer areas to get into the equity on support levels slowly on the accumulation areas.

THE BOTTOM LINE:

The markets rallied nicely over the last month and as indicated on the Bartometer we got Buy signals on October 8th and we are in seasonal strength. Even though the seasonal indicators are still positive, technical indicators are now getting a little overbought. This means not to add a lot to the markets like I indicated last month. I like large cap growth as well as small value and financials. Artificial intelligence should be one of the fastest growing sectors over the next 10 years.

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.

[ New Training ] Crypto Finding The Next Big Thing

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

Register now

It’s free to attend and is purely an educational session, there is NO follow on course for sale. 

He held this same training yesterday and it was full to capacity, 1,000 people attended with almost 1,000 turned away.

So if you or a friend / relative / colleague want to join tomorrows crypto training, get your place straight away

(forward this post to anyone you think might be interested so they don’t miss out)

Register now

Darren will be covering:

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!

To get your place go to:

Register now

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

Regards

Steve Hill, CEO 

AIQ Systems

P.S. We are not planning a replay so do make sure you mark this on your calendar / set a phone reminder so you don’t miss it.

P.P.S We’re also working on getting major crypto data into AIQ.

Bartometer

October 10, 2021

Hello Everyone,

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.