The US stock market, as measured by the S&P 500 Index (S&P) finished the month of March 4.00% above the BLUE LINE, compared to +2.81% above the BLUE LINE at the end of February. With price behavior continuing to be volatile with price oscillating through the BLUE LINE, we continue to categorize the primary trend as Neutral.
THE BIG PICTURE
Sometimes it can help to step back and look at the big picture. The chart below is a weekly version of the S&P of the past five years. Each vertical line on the chart represents one week of price behavior.
From a technical analysis perspective, the S&P may be within a second sideways trend. If so, it is possible for price to consolidate over the coming months at or below the current price level, similar to what happened during 2014 and 2015 (See sideways trend 1 above). At this moment the S&P is back to where it was at the end of January 2018.
We have recently posted a video presentation on our website called A Historical Perspective that illustrates these types of trends, or trend channels, as they are often called. Please visit www.BlueLineInvesting.com/process if you would like to see how these types of trends have played out since the 1930’s.
For clients of BLUE LINE INVESTING® please do not hesitate to call us with questions at (833) 258-2583.
BLUE LINE INVESTING® (BLI) is an investment process that seeks to align investment decisions with the prevailing primary trend of the financial markets. BLI seeks to remain fully invested when the financial markets are experiencing either a long-term rising primary trend or a short-to-intermediate sideways trend. When the primary trend begins declining however, the process follows a 3-phase sell process to attempt to limit downside loss. We believe Warren Buffett said it best with his two rules: “Rule No. 1 – Never lose money. Rule No. 2 – Never forget Rule No. 1.”
The S&P 500 Index is one of the most commonly followed equity indices, and many consider it one of the best representations of the U.S. stock market, and a bellwether for the U.S. economy. It is comprised of 500 large companies having common stock listed on the NYSE or NASDAQ. The volatility (beta) of the account may be greater or less than the index. It is not possible to invest directly in this index.
Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volumes. Technical analysis attempts to predict a future stock price or direction based on market trends. The assumption is that the market follows discernible patterns and if these patterns can be identified then a prediction can be made. The risk is that markets may not always follow patterns. There are certain limitations to technical analysis research, such as the calculation results being impacted by changes in security price during periods of market volatility. Technical analysis is one of many indicators that may be used to analyze market data for investing purposes and should not be considered a guaranteed prediction of market activity. The opinions expressed are those of BLI. The opinions referenced are as of the date of publication and are subject to change without notice. BLI reserves the right to modify its current investment strategies based on changing market dynamics or client needs.
Past performance is not indicative of future results. This material is not financial advice or an offer to sell any product. The information contained herein should not be considered a recommendation to purchase or sell any particular security. Forward looking statements cannot be guaranteed.
Advisory services offered through Aptus Capital Advisors, LLC, a Registered Investment Adviser registered with the Securities and Exchange Commission. Registration does not imply a certain level or skill or training. More information about the advisor, its investment strategies and objectives, is included in the firm’s Form ADV Part 2, which can be obtained, at no charge, by calling (251) 517-7198. Aptus Capital Advisors, LLC is headquartered in Fairhope, Alabama.