The Bottom Line
- 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 accounts are fully invested and mainly allocated in Preferred Income Funds and Equities.
Stock Market Price Action
Long-Term Price Action – Positive
The S&P 500 is above both it’s 50 and 200-Day Moving Average (see chart below), both those averages are trending higher, and price hit a fresh 52-week high last week. The bottom line is that we are in a bull market and price action on both a short and long-term basis is positive.
Short-Term Price Action – Positive
In last week’s newsletter, I wrote that as long as the S&P 500 did not drop below about 2435, my short-term bias on the market would remain positive.
The S&P 500 dropped 1.45% on Friday which brought it down to 2438, and slightly below its 50-day moving average. Recently, each time the S&P 500 has dipped below its 50-day moving average, it has quickly advanced and hit a new high. This trend looks to have continued in that we got a bounce off that moving average today. In addition, the market did not drop below that 2435 level I wrote about last week and the uptrend line is still intact. Thus short-term price action is still positive.
In summary, we are in a strong bull market and hitting new highs and this is Bullish! The market has been trending up nicely allowing us to stay fully invested and capture gains without having to sit through much in the way of pullbacks. At some point that will change, which is why I monitor the markets daily. When it does, I will have no problem moving money out of stocks and into bonds/money market funds like I did at the end of 2015. However, as of right now the trend is up for stocks.
If you have any questions, please feel free to contact me.
Craig Thompson, ChFC
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.