In last month’s article, Let’s Get Technical, I highlighted three vastly different investments to show their commonality. Regardless of the investment–whether Bitcoin, Gold, or Stocks–their investment behavior remains essentially the same over time. The key is to learn how to recognize this behavior to attempt to harness market volatility rather than remain a slave to it.
In this month’s post I am going to share a revelation I made early this year. I have been wanting to share this for months but have been holding off. Its importance, in my opinion, requires it to be in video format rather than an article post, but since there are seven parts to it, I will simply share the “big picture” here with the rest sometime in the months ahead.
The following chart of the S&P 500 Index spans a window of time that is one month shy of 101 years. Each line represents one year of stock market behavior. A black line represents a year when the S&P finished the year positive from the previous year, and a red line represents the opposite. The horizontal “tick” line found within each black or red line represents the closing S&P price for each calendar year. When you look at this chart from this perspective, what do you see?
Chart courtesy of StockCharts.com, Data as of 11/30/25
By itself, this chart doesn’t seem to reveal much of anything. But when we change our perspective and view this chart in the context of a trend, everything changes.
Chart courtesy of StockCharts.com, Data as of 11/30/25
If you are one of my clients or have read my book, what do you see now? When we view the S&P from this perspective, I hope you can see what I have been talking about and writing about for years. This chart, in my opinion, reveals the hidden order that exists within the financial markets. It reveals what I illustrated in last month’s post but on a much grander scale of time.
Within this chart we see a rising trend, first introduced in chapter one of my book. We see two massive channel corrections, from 1930-1931 and 2000-2009 (referenced in chapter five of my book). And if history repeats, somewhere ahead (possibly years ahead), this rising trend will come to an end. When it does the market itself should confirm the change in trend once price falls below and remains below its BLUE LINE (referenced in chapter two).
I believe the years ahead could prove challenging for many investors, even for many investment professionals. But I don’t believe it will be for everyone. For those with knowledge of stock market history and behavior, who choose to follow investment strategies that can adapt to changing market trends, they may eventually find themselves in the enviable position of taking advantage of stock market volatility rather than being a slave of its negative side.
STOCK MARKET, WATCHING FOR THE TOP:
Chart courtesy of StockCharts.com, Data as of 11/30/25
The S&P finished the month of November 8.7% above the Blue Line, compared to 10.1% above the Blue Line at the end of October.
If you are not a current client and would like to learn if this strategy could benefit you, please send an email to info@bluelineinvesting.com with the word “Strategy” in the subject line.
Jeff Link
Portfolio Manager
Disclaimers:
The BLUE LINE INVESTING® (BLI) investment process was founded on over 95 years of stock market history. It seeks to identify and align investment decisions with multiyear trends. Various aspects of this process have been illustrated in my book Protecting The Pig: How Stock Market Trends Reveal the Way to Grow and Preserve Your Wealth.
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.
Investment advisory services offered through Guardian Wealth Advisors, LLC D/B/A Blue Line Investing. Guardian Wealth Advisors, LLC (“GWA”) is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about GWA’s investment advisory services can be found in its Form CRS or Form ADV Part 2, which is available upon request.
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