Stock Market and Account Update

Feb 7, 2022

Market Breadth


Market breadth has been signaling internal market weakness since the first half of last year.


Market breadth has been deteriorating for months. In our January 25, 2022 Update I highlighted how important segments of the market (Industrials, Transportation, Small Cap, and International Indexes) were falling or consolidating while major market indexes were rising last year.

And in our January 3, 2022 Update we explained how large-capitalization stocks were advancing; however, small, mid, and micro-capitalization indexes were not participating in the advance.

Nothing has changed over the past month in that stock market breadth is still poor.


S&P 500 Index – Market Proxy


Major market indexes broke down at the beginning of this year and are in downtrends.


The S&P 500 is sitting above its 200-day moving average and below the 50-day average.

Last week’s advance retraced 61.8% of the decline from last year’s market peak. This is a key Fibonacci level and if the market is as weak as market breadth is signaling, I would not expect price to advance above this level. If it does, it would be bullish for the broader stock market, especially if it is accompanied by positive market breadth.

In addition, the 50-day moving average, which is right above this level could act as resistance if the index can garner enough buying interest to make a run higher.

Client Account Update


Because of elevated market risk, client accounts are allocated extremely defensively.

The stock portion of our portfolio is minimally invested in stronger segments of the market such as commodities, banks, utilities, broker-dealers, country-specific international index funds, and gold. These positions are hedged with index short funds.

The bond portion of our portfolios are minimally invested given poor bond technicals.

As always, we monitor market conditions daily and look to protect our clients from losses during times of major stock and bond market stress.


If you have any questions, please feel free to send me an email.

Craig Thompson

Craig Thompson, ChFC

Email: [email protected]

Phone: 619-709-0066

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 may discuss and display, charts, graphs, formulas which are not intended to be used by themselves to determine which securities to buy or sell, or when to buy or sell them. Such charts and graphs offer limited information and should not be used on their own to make investment decisions. Most data and charts are provided by

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.

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