The Bottom Line
Bias:
Positive for Stocks.
- The stock market is in an uptrend on both a short and long-term basis.
- While the summer months are typically bad for stocks and sentiment is currently negative, the weight of the evidence is Bullish for the stock market.
Client Update
Client accounts are fully invested.
This week’s newsletter is going to be short since not much has changed over the past week, and it is a holiday week. Here are a few thoughts on the current state of the stock market.
- Typically, in my Market Technicals section, one of the categories that I highlight is Momentum. Recently I have not been including it because the market is currently trending and momentum indicators are not effective in a trending market. What is important to monitor in a trending market is price action and market breadth.
- Market breadth is currently positive. Most sectors are near 52-week highs and/or have recently hit those highs. For example, the Transportation sector closed at a 52-week high today. When most major market sectors are hitting fresh highs, this is a bullish characteristic for the overall market.
- Price action is positive on both a long and short-term basis. Yes, the stock market basically moved sideways for the month of June. The stock market can digest gains by either a price retracement or a consolidation over time. The market consolidating over the past month after a move higher in May is also bullish.
- As long as the S&P 500 does not retrace more than about 61% (an important Fibonacci retracement level) of the previous advance, my short-term bias for the market should remain positive.
If you have any questions, please feel free to contact me.
Craig Thompson, ChFC
Email: [email protected]
Phone: 619-709-0066
About Asset Solutions
Asset Solutions Advisory Services, Inc. is a Fee-Only Registered Investment Advisor specializing in helping the needs of retirees, those nearing retirement, and other investors with similar investment goals.
We are an “active” money manager that looks to generate steady long-term returns, while protecting clients from large losses during major market corrections.
Asset Solutions is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.