Blog
We regularly update our clients as to what we're seeing in the markets and overall economy, as well as provide some basic portfolio changes and updates we are making. Stay tuned to learn more every two weeks!
Walk the Line
Whether you're a Johnny Cash fan or not, the market has been Walking the Line for the first 3 months of this year....and it actually does feel a lot like Prison! We've updated our chart to include some new and potential trend lines.
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The Good, The Bad & The Here!
We've been discussing for some time that you can't have such a long and strong downtrend line in the S&P 500 (which lasted the entire year of 2022), and not expect it to be tested as support after the eventual breakout.
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The Market's Wish
Key TakeawayThe market is wishing that inflation will subside and that the Fed will begin to lower rates later this year. However, as the old adage goes, be careful what you wish for! During the two major bear markets of recent...
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The January Effect
When borrowing costs are rising, investors are wary of buying risk assets. This leads to less borrowing by households and businesses which means less money being spent. In turn...
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Bah-Humbug??
Key TakeawayThe famous Santa Claus rally officially begins today and runs through the first couple of trading days of the new year. Will Santa deliver a great gift or a lump of coal this year?? I guess we'll find out soon...
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Resistance held
Following the announcement this week of increasing the Fed Funds rate by another 50 bps, there was a very hawk'ish tone set forth by Fed Chairman Powell of no end in sight, which the market did not digest very well. With this recent...
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Cresting Wave
The S&P 500 has enjoyed a nice rally over the pays couple of months. Can it continue or has this wave crested? Check out this episode to understand the...
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Down Trend Decision Point
The recent breakup in the market, which we've played, is at a turning point. For the very near-term, the market will either turn up or down. As you will see, the S&P 500 is right in the middle of its down- trending channel. As a result...
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Bear Bounce
As you will see that the bulls are making a move off of the bottom as illustrated by the S&P 500, but it is still very dependent on the direction of the 10-Year Treasury Yield and the Dollar - both of which are relentlessly climbing...
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Tip of the Iceberg??
Let me be the first to point out that no two bear market corrections are the same, but sometimes they can behave in similar fashions at various stages of a correction. Only time will tell as to how close they ultimately...
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Watching the Dollar!
As referenced in previous market updates, 2022 has been and will continue to be a very volatile year - so stay buckled! We will get through this, and in years to come, I believe we are in a time that will be viewed as...
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Support Zone
The S&P 500 took a punch to the gut after Fed Chair Powell promised to get inflation under control at all cost after last week's Fed meeting. Clearly the market did not take well to his tough stance. So where are we?
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Approaching Resistance
Okay - We're not tooting our own horn, rather pointing out how technical analysis can be predictive and productive. Looking at our prior Market Update post (2 weeks ago), you will see that we...
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Market Wind Up
The S&P 500 continues its downward trend; however, is consolidating in a "wind up" pattern that will result in either...
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Mixed Signals - Market Indecision
The S&P 500 is still in a clear downtrend; however even "Bear Markets" have rebounds that can be significant. For instance...
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Are stocks rebounding?
The S&P 500 is in a clear downtrend. There's no one denying that, and...
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It's all about Inflation!
The May Consumer Price Index (CPI) report was released at 8:30am EST and it showed that inflation remains red hot and persistent. While expectations were for a rise of 0.7%, the number jumped up...
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Break Up or Down?
The S&P 500 has dropped below key support and is now retesting that level. So the million dollar question at this point is...
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S&P 500 WINDS UP
The market went from trending up to now trending sideways. A consolidation of gains is not uncommon after a long up-trend. So now we're stuck in a sideways pattern that will eventually breakout to the upside or break down creating...
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Stocks Rise from Oversold Levels
The S&P 500 is holding short-term support as indicators rise from extreme oversold levels. Our tactical portfolios, which follow short-term momentum signals, are starting to rotate back into growth stocks.
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S&P 500 Enters Correction Territory; Uptrend Weakens
The sell-off in global equities has been persistent over the past week, which supports defensive positioning. We continue to raise cash and reallocate capital from growth stocks into value stocks.
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Rising Yields Weigh on Stocks and Bonds
Equities continue to slide as the 10-year Treasury yield broke above 1.75%. Therefore, we positioned portfolios toward value/defensive sectors, maintained some cash, and will monitor non-US stocks, commodities and currencies.
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Growth Stocks Dip as Value Stocks Gain
The pullback in equities occurred during a spike in Treasury yields last week, which is negative for growth stocks. Our indicators shifted to risk-off this week, and we positioned for upside in equal-weight SPY and value stocks.
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Market Rally Pauses Into New Year
Our indicators are in in moderate risk-on mode and we remain overweight healthcare. The S&P 500 faces initial resistance around $4,800, which means short-term upside could be limited. Equity returns tend typically narrow in January.
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S&P 500 Makes New High as Seasonal Buyers Return
The S&P 500 reached an all-time high as year-end buying accelerated. Historically, equities tend to rally during the final trading week of the year and into early January. We remain overweight healthcare.
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Defensive Sectors Rise With Volatility
Volatility has been elevated over the past month, indicating a greater level of uncertainty among market participants. This is one reason why defensive sectors have outperformed recently, which we expect to continue.
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Mixed Rebound
The S&P 500 held support around its 100-day moving average along with improving breadth (more stocks starting to trend higher), although defensives such as consumer staples are outperforming. We remai selective with moderate risk exposure.
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Limited Upside for Risk Assets
Our indicators continue to suggest a moderate exposure to risk over the short-term, although we are likely to take a more cautious approach heading into the new year.
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Equities Hold Support as Volatility Returns
Key Takeaway Global markets did not rest easy during the U.S. Thanksgiving holiday last week. The S&P 500 declined nearly 4% from an all-time high around $4,700, while the CBOE Volatility Index (VIX) spiked to its highest level since...
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Narrow Upside
Key Takeaway The S&P 500 index remains in an uptrend, although less stocks are participating on the upside. This is seen in the percent of stocks trading above their 200-day moving average, which declined about 7% over the past two...
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Moderate Risk-On
Key Takeaway The S&P 500 appears overbought after a near 5% rise over the past month. Our indicators shifted to moderate risk-on this week, although we will remain active on pullbacks given seasonal strength for equities. For now,...
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Monitoring Upside in Gold
Key Takeaway Precious metals, particularly gold, are starting to rise as central banks appear to be in no rush to raise interest rates. Despite plans to scale back asset purchases (quantitative easing), market participants view...
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Seasonal Strength for Equities
Key Takeaway November is typically a strong month for stocks. Therefore, we are positioned for seasonal upside in cyclical/value sectors based on historical returns. Consumer discretionary, transports, materials, and even clean energy...
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Greater Upside Participation
Key Takeaway A majority of stocks in the S&P 500 have stabilized and are starting to trend upward. This is a positive development for the overall market, especially amid Q4 seasonal strength. We continue to deploy cash into...
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Markets Stabilize as Breakouts Unfold
Key Takeaway Global equities staged an impressive rebound from key support levels last week. Our indicators shifted to risk-on, which allowed us to deploy cash into sectors/stocks with relative strength such as materials, financials,...
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Rotation to Value Stocks
Key Takeaway Value stocks are poised for further upside relative to the S&P 500. As a result, we are building positions in lagging sectors such as financials and energy. Consumer discretionary and small-caps are also improving relative...
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Volatile October
Key Takeaway Stocks continue to slide as the market enters a seasonally volatile period. Historically, October tends to produce choppy trading conditions ahead of a seasonally strong November. Therefore, we are raising cash across...
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Bond Yield Breakout
Key Takeaway The 10-year Treasury bond yield broke above resistance at 1.40%, which could benefit value stocks relative to growth stocks in Q4. Our indicators suggest the risk-on rally is stabilizing after the volatility spike last...
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Initial Support Broken
Key Takeaway Global markets are under pressure, stemming from weakness in China’s credit market. The S&P 500 broke below the 50-day moving average, which was an important gauge of trend support this year. We expect short-term...
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Risk-on Weakens
Key Takeaway The S&P 500 is testing uptrend support after a pullback last week. Our metrics indicate moderate risk-on positioning ahead of a seasonally weak period for equity markets. We have a mix of defensive positioning,...
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Volatility Trending Lower
Key Takeaway The CBOE Volatility Index (VIX) made a series of lower highs over the past year, supporting the market’s rise to all-time highs. Lower volatility (VIX below 20) is a positive sign for risk-on positioning, although we...
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Cyclical Strength Ahead
Key Takeaway Equities maintained trend strength in August and avoided breakdowns that would have triggered a shift to cash. Portfolios are positioned for relative strength in small-caps and other neglected areas of the market. The...
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Warning Signs From Credit Spreads
Key Takeaway The U.S. high-yield corporate credit spread is widening, which typically precedes downturns in risk assets such as equities. While our technical studies have not signaled an immediate shift to cash, we are starting to...
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Monitoring Stock Bond Rotation
Key Takeaway The S&P 500 is holding technical support, driven by strong earnings growth and breakouts on the individual stock level. However, the uptrend in equities is narrowing, which could signal a seasonal pullback. We are...
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Long-term Downtrend in Treasury yields
Key Takeaway The 10-year Treasury yield is holding support above 1.20% as extreme short positioning in bonds recede. Typically, rising yields create opportunities in banking stocks, which benefit from higher interest income. Value...
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Preparing for Seasonal Weakness
Preparing for Seasonal Weakness Damanick Dantes, CMT Portfolio Director, Cannon Advisors Key Takeaway The S&P 500’s uptrend is narrowing and could enter a period of seasonal weakness. August is typically a mixed month, so...
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