Blog
From Breakdown to U-Turn
Market Overview Over the past month, the market has undergone a meaningful shift. What had been a weak and uncertain environment has quickly transitioned into a strong uptrend. The speed and persistence of this move are important and...
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The Breakdown We Were Watching For
In last month’s newsletter, we discussed how the market had been trading within a consolidation pattern for about six months and noted that a break below key support would increase the risk of a correction. That scenario has now played out.
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Consolidation or Topping Pattern?
Market UpdateFor the past five months, the major indexes have moved sideways inside a broad consolidation (Darvas Box). That type of action often represents digestion after a strong advance. However, over the past month, conditions...
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Line In The Sand
Over the past four months, the index has largely moved sideways, chopping around and consolidating after a strong advance earlier in the year. This type of price action often precedes a larger move, making this an important area to focus on
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Where Do Stocks Go From Here?
Long-term, the stock market remains in a bullish trend. However, over the past several months, the market has moved sideways, with price action becoming increasingly choppy.
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Inflection Point
In our November newsletter, we noted that the Nasdaq 100 (QQQ) was likely due for a short-term pullback after reaching the upper boundary of its rising price channel. That expectation played out as the index drifted lower ...
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Bullish Strength and Declining Breadth
October was another strong month for stocks, with major indexes continuing their advance. However, not everything beneath the surface is ideal.
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Momentum Carries Into Fall
The market continues to show impressive resilience. The S&P 500 has maintained its upward path, staying above important support levels and showing no signs of breaking its longer-term trend.
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Riding the Trendline
The bullish trend remains intact. Major indexes advanced again in August, with the S&P 500 holding firmly above its uptrend line and key moving averages.
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Bullish Momentum Persists
The market continues to show strength, with major indexes posting modest gains in July and maintaining their bullish trends. We’re still seeing strong technical conditions, with the S&P 500 holding above key moving averages and risk-on...
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Riding the Wave
We have maintained a bullish stance since late April, and the market has continued to reward that view. The bulk of the technical data remains exceptionally strong. Both the S&P 500 and Nasdaq 100 reached all-time highs last week...
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Above the Mendoza Line
Above the Mendoza Line The phrase “above the Mendoza Line” comes from baseball, where a batting average below .200 is considered very poor. In investing, the 200-day moving average serves a similar role as a performance benchmark. When...
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Market Gains Traction: Where We Go From Here?
In last month’s newsletter, we left off with the market under pressure. After a sharp drop from the February highs, the S&P 500 had staged a modest bounce that formed a bear flag. This breakdown was a key signal that the market was likely..
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Opportunity Ahead
The market has shifted decisively over the past month. After spending several months in a narrow trading range, the S&P 500 has broken lower with increasing momentum, signaling a possible transition from a consolidation phase into a more...
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Market On A Ledge
The market has taken a turn this past month, with volatility picking up and key technical indicators signaling caution. The S&P 500, which had been trading within a well-defined range for the past four months, has now fallen sharply,...
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Choppy Waters: What Market Technicals Are Telling Us Now
Market Update: Bullish Trends Remain Intact The market continues to show resilience, with key technical indicators reinforcing a bullish outlook. While every advance has been met with periodic pullbacks, each of those pullbacks has...
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Market at a Fork in the Road: Decoding the Short-Term Outlook
The market’s performance over the past month reflects a mixed picture of resilience and weakness. While the S&P 500 remains in a bullish structure and has held above key support levels, a closer look reveals significant divergence
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Market Displaying Strength
The market continues to display near-term strength, with all major indexes in confirmed uptrends. The S&P 500, Nasdaq 100, and Russell 2000 are all above their key moving averages, which are trending higher, signaling sustained bullish...
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Testing Support: Will the Bulls Hold the Line?
Summary The stock market remains in a bullish long-term trend, with the S&P 500 and Nasdaq 100 advancing strongly over the past year. Each index has seen brief pullbacks, ultimately resolved higher, affirming the market’s strength....
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Market Remains Bullish
Market Summary: The stock market remains bullish, continuing the trend we've seen over the past year. As noted in last month’s newsletter, major indexes have been advancing with healthy pullbacks followed by strong rebounds, and...
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Bullish Breakout: Strength in Numbers
Bullish Breakout: Strength in Numbers As we move into September, the stock market's uptrend, which began in early 2023, continues to hold firm despite experiencing a series of routine corrections. In last month's newsletter, I...
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Market Correction Underway
Market Correction Underway In my last two newsletters, "Narrow Market Breadth" and "Stock Market Internals Are Deteriorating Rapidly," I highlighted significant technical weaknesses within the stock market, particularly narrowing...
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Stock Market Narrow Market Breadth
Narrow Market BreadthInternal Market Weakness As we move further into the year, stock market indexes continue to show impressive gains, reflecting a robust uptrend that might suggest a broadly positive market sentiment. The major...
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Stock Market Internals Are Deteriorating Rapidly
The S&P 500 index reached an all-time high this week; however, market internals continue to flash warning signs. A handful of large-cap semiconductor stocks appear to be propping up the market, but they may be the last chips to fall....
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Market in Confirmed Uptrend, but Internals Flash a Warning Sign
During the past month, the S&P 500 Index advanced to all-time highs and is in a confirmed uptrend. However, market breadth is increasingly suggesting internal market weakness. I view this deterioration in market breadth as a warning,...
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Is The Pullback Over?
Summary In last month’s newsletter, I wrote the following: “In the short term, the stock market is overbought, momentum is waning, and volume indicators are falling. This is a warning (not a signal) that the market is ripe for a...
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Market Technicals Diverge From Market Consensus
Summary Stocks are in a bull market and are not overstretched from a long-term price perspective. In the short term, the stock market is overbought, momentum is waning, and volume indicators are falling. This is a warning (not a...
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Cross Currents
Stock Market In my January 2, 2024 Newsletter, Breadth Thrust, I wrote about how the market experienced a breadth thrust that historically has proceeded strong longer-term returns for stocks. In my February 4, 2024 Newsletter, Strong...
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Strong Price Action
Major Data Points – February 2024 The stock market is in a strong bullish environment. Short-term the market is extended and nearing the upper end of its uptrending channel which is an area where it has pulled back in the past. Market...
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Breadth Thrust
Major Data Points – January 2024 Bullish market signal – Breadth Thrusts. Short-term market indexes are overbought and at resistance. Most economists expected a recession in 2023. It didn’t happen. The economy is still a risk factor in...
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Bullish Breakout
Stock Market Our newsletter typically goes out on the first Monday of the month, but I am sending this one out early because of recent market developments that I wanted to share. After reaching overbought levels and pulling back from...
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Inflection Point
Stock Market As mentioned in our August 7th newsletter, Stock Market Weakness Likely, the market reached overbought levels and was due for a pullback. Below is the same chart that I presented in that update. I stated that the market...
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Big Move Coming!
Stock Market At Major Inflection Point In our August 7, 2023 Market Update, Stock Market Weakness Likely, I mentioned the market was at the top of its uptrending channel and was likely to correct to the lower half of that channel. Here...
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Momentum Turns Positive
Stock Market Breakout In my August 4th update, Stock Market Weakness Likely, I pointed out that the market was likely to pullback, and as long as that weakness did not decisively violate the lower end of its uptrending channel, the...
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Stock Market Weakness Likely
Stock Market Weakness Likely in the Near-Term As mentioned in our last update, Technology Getting Tired, the stock market reached a level where I expect major market indexes to pullback. Below is a chart of the S&P 500 ETF (SPY) in the...
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Technology Getting Tired
Sector Rotation Technology Starting to Look Weak One of the hallmarks of a bull market is sector rotation. I am sending out this update because we are starting to see the early signs of money moving out of technology, which has led...
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Signs of a Tradable Rally Starting to Emerge
I am seeing signs that the stock market could be entering a period of short-term strength within a longer-term downtrend. Below is a chart of the S&P 500 ETF (SPY) in the top panel and the MACD ( a momentum indicator) in the bottom...
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Mostly Sunny With a Chance of Thunderstorms
The S&P 500 The stock market has continued to build on last month’s positive technical improvements. Below is a chart of the S&P 500 Index and here are my takeaways. The index has advanced above its downtrend line (red line). The index...
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Making Hay While The Sun Shines
In our last market update, I wrote about how market technicals were improving. That improvement has continued and the market is displaying strength that we have not seen in over a year. Here is a rundown of the positive developments...
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That’s A Wrap
2022 is a wrap. Below are the returns for the calendar year. 2022 Major Equity Index Returns: Dow Jones Industrials Index -8% S&P 500 Index -19% Nasdaq 100 Index -32% 2022 Bond ETF Returns: iShares 20+ Year Treasury Bond ETF (TLT) -31%...
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Market Internals Improve
The S&P 500 The Federal Reserve has been increasing interest rates as a means to manage inflation by reducing overall demand in the economy. This strategy is intended to stabilize economic conditions. However, there is a concern that...
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Stock Market Not As Strong As You May Think
The Economy The Fed is raising rates in hopes of taming inflation by reducing demand. When the Fed eventually reverses course and begins to lower rates, it will be accompanied by a weak economy (probably a recession). Historically, the...
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Market Rises on Weak Internals
S&P 500 Daily Chart Below is a chart of the S&P 500 in the upper panel and the MACD (momentum indicator) in the lower panel. Here are my takeaways. Momentum has turned positive. The S&P 500 Index has advanced strongly above its 200-day...
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Market Risk Returns
The market drop over the last two days was significant and I now view short-term risk to be elevated. The S&P 500 index has fallen below the uptrend line that I highlighted in my March Newsletter and is now below its 200-day moving...
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Stock Market Still Bullish
The stock market is still bullish despite February’s pullback. What I wrote in last month’s newsletter still applies: “the market is displaying strength that we have not seen in over a year. Here is a rundown of the positive...
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When The Levee Breaks
Bear market rallies tend to give people hope, only to dash those hopes with the next move lower. It can be emotionally and financially draining. The recent advance off the October lows showed none of the signs that would suggest a...
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Danger Zone
The Economy The Fed is raising rates in hopes of taming inflation by reducing demand. Every bear market advance this year is propelled by investors’ expectation that the Fed will pivot. And each advance gets squashed when the Fed...
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Early Warning – Topping Signals
The stock market is at a short-term inflection point. The advance off the October lows has been indecisive and has lost momentum right under resistance (200-day moving average). This would be a logical area for the market to reverse...
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The Tide Has Turned
Market Technicals Turn Positive We usually publish our monthly updates on the first Monday of the month. This month I am sending it out a week early due to positive developments in the stock market. Bottom Line: Improvement in market...
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Buckle Up – Market Volatility Likely To Increase
Bond Market Dislocation – A Tight Fed – And Falling Stock Prices The pervading theme amongst many notable macroeconomic experts is that the continued dislocation in the bond market (too many sellers of bonds and not enough buyers)...
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Market Hanging By A Thread
Below is a daily chart of the S&P 500 index. Here are the major takeaways: The index is below its 200-day moving average and that average is falling. This is characteristic of a bearish longer-term market environment. After advancing...
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Coiled Spring
The market is in a short-term advance within a longer-term decline. The question is. Has the market bottomed and is this the beginning of a longer-term move higher or is the advance a bear trap? The market is at an inflection point and...
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Bears Firmly In Control
S&P 500 Index Below is a daily chart of the S&P 500 Index. Here are the critical aspects of the chart: The index is in a downtrend defined by a series of lower-highs and lower-lows. Price advances keep failing at resistance. Price is...
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Capitulation Common at Market Bottoms
The S&P 500 Index is down over 22% (peak-to-trough). Unfortunately, the largest declines in equities have historically occurred as a result of recessions, and odds are high that we are going to be entering one soon. The bear markets of...
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Don’t Get Your Hopes Up
Easy money policies by the Fed and excessive fiscal spending have placed the economy and thus markets in a position of weakness. Inflation is raging and the Fed is trying to reign it in as the economy is showing signs of slowing. The...
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How Much Risk Are You Taking?
I recently met with a friend who asked me to analyze his retirement account. His account is allocated similarly to most retirees which is 60% invested in stocks and 40% in bonds. He uses a passive buy-and-hold strategy. I took his...
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Hybrid Model Portfolios – Now Available!
Yes, I want to learn about your new model portfolios Craig Thompson, ChFC https://assetsolutions.info/ Email: craig@assetsolutions.info Phone: 619-709-0066 Asset Solutions Advisory Services, Inc. is a Fee-Only Registered Investment...
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