“The only thing that is constant is change”

– Heraclitus



Today while performing my weekly research, I came across what may be an important factor regarding the current stock market rally. With the media continuing to announce new highs almost every other day (even if prices rise by only a few points), I was curious to see which specific stocks may be contributing the most in the current price rally. Please refer to the screenshot below that highlights the top five stocks by market weight for the S&P 500 Index as of the close of trading on November 14, 2019. All information is courtesy of SlickCharts.com (www.slickcharts.com).

From the data above, you can observe that of the 505 stocks that comprise the S&P 500 Index, 15% of the current weight of the index is comprised of only 5 stocks: Microsoft, Apple, Amazon, Facebook, and Berkshire Hathaway. Using the BLUE LINE INVESTING® process, Microsoft’s share price is currently trading 15% above its BLUE LINE; Apple’s is 26% above its BLUE LINE; Amazon is 2% below its BLUE LINE; Facebook is 7% above its BLUE LINE; and Berkshire Hathaway is trading 6% above its BLUE LINE. While three of the five are trading within what our process considers “healthy” ranges, Microsoft and Apple are not. As a quick reminder, in February 2018 the S&P 500 Index rose almost 13% above its BLUE LINE, right before experiencing an 11% price correction.

My intent for this special report is not to make a prediction of what may happen next. The market may very well continue to rise in the short-term. Or, at some point it may experience a sharp price correction. Historically speaking, the higher price continues to rise in relation to the BLUE LINE with such a concentration at the top, the greater the risk of at least a price correction.

Thank you for reading the BLUE LINE INVESTING® PRIMARY TREND update, and please do not hesitate to call us at (833) 258-2583 with questions or if we may be of service.

Jeff Link


Do you find this commentary beneficial? If not, please let me know how it can be improved. Please send an email to [email protected].



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.