posted on November 13th 2015 in Market Commentary with 0 Comments /

Market Commentary 

Let’s not forget that the biggest determinate of the success of bullish strategies (buying stocks, ETFs, mutual funds) is the market itself. Most things trend with the market. Markets always move around — but a series of higher highs and higher lows is a sign of a strong trend. #1 shows us the last market high set back in May. Since then, several rallies have failed to break into higher ground, while lows have managed to be lower. This increases the probabilities that the market may be “topping,” or may just be gearing up to take an extended breather. No, that’s not a forecast, just a probability. This is where having a plan and making sure you are on it is important — so you can weather the storms and be positioned well after them.

Notice next that the November high at #3 was only able to get back up to the March high, not the May, June/July, or July/Aug highs. The bulls continue to charge ahead, but each time, they are falling a little shorter. At #4, we saw the 50-day SMA (Simple Moving Average) cross below the 200-day SMA. Both of these are indicators of trend. Having both of them rising together is a good sign. Having the shorter cross below the longer is not a good sign, as it indicates the trend may be weakening. While the 50 has recovered some (#6), the 200 has flattened. No doubt the market had hoped to find some support at the 2039 level, but it has now blown through that level twice in August and now in November. We may hope to find some degree of support at around 2015 (#5), but there is no indication so far that it would be strong support.

 

Strategy Commentary  

Always remember to keep a long-term view and don’t build emotions in day-to-day activity. Lots of analysis is done to build portfolios with the characteristics we desire. Always remember that in between buy and sell is simply hold.

about the author: Joshua I. Wilson CMT

Josh-Wilson CMTJoshua I. Wilson, CMT®, AIF® is a partner and wealth manager who has managed over $2B for TD Ameritrade. Joshua led the national training and development program for all of TDA’s new advisors and managers, won a national coaching award. Joshua gave his graduation speech at Brown University. Joshua is a Chartered Market Technician® (CMT®) and a Accredited Investment Fiduciary® (AIF®).

Learn more and/or Contact Joshua

Continue Reading

Other articles filed under Market Commentary

The Randomness of Global Equity Returns

July 17, 2019 - Investment opportunities exist all around the globe   Across more than 40 countries, there are over 15,000 publicly traded companies. If you listen to the news, however, some countries may seem like better places to invest than others based on how...
Continue Reading

Getting to the Point of a Point

March 22, 2019 - A quick online search for “Dow rallies 500 points” yields a cascade of news stories with similar titles, as does a similar search for “Dow drops 500 points.” These types of headlines may make little sense to some investors, given...
Continue Reading

Are You Sure You’re Saving Enough for Retirement?

February 11, 2019 - When people think about wealth management, they often are thinking about retirement — and the singular financial goal of getting there. “How much do I need to live off in retirement?” they think, and then calculate a number from there....
Continue Reading

Picking Funds Based on Performance: A Fool’s Game

January 23, 2019 - You’ve probably heard from the do-it-yourselfer at your office. “I just invest in the funds with the best performance.” But is this a reasonable? Though a book could be written citing numerous academic studies to address the validity of this...
Continue Reading

Market Volatility

January 4, 2019 - Joshua Wilson, our CIO, shares thoughts on market volatility.
Continue Reading

Return to Blog Home