The BLUE LINE INVESTING® Primary Trend Update

Commentary:

The US stock market, as measured by the S&P 500 Index¹ (S&P) finished the month of December 7.71% below the BLUE LINE, down from essentially at the BLUE LINE at the end of November. With the S&P currently below the BLUE LINE, and without having experienced either a Phase 2: WARNING or Phase 3: CONFIRMATION from the BLUE LINE INVESTING® (BLI) Sell Process, we continue to categorize the primary trend as Neutral.

As a quick reminder, when markets are in a rising trend, we have seen that price tends to “bounce” off the BLUE LINE on price corrections before rising higher. But when the trend changes to a declining trend we’ve found that the opposite tends to occur. Price tends to be “rejected” by the BLUE LINE before declining lower. While we believe it is still too early to come to any definite conclusions, the fact that price is below the BLUE LINE, along with other indicators we use, suggests the market “correction” may not be over.

We will be sending out a report to clients in the coming days called the BLUE LINE INVESTING® Contingency Plan to help explain what strategic actions we have taken so far and anticipate taking over the coming weeks and months as long as price remains below the BLUE LINE. It may be time to flip our investment strategy upside down, so to speak.

Please call us at (833) 258-2583 with any questions and we look forward to talking with you soon.

Jeff Link

 

Disclaimers:

Blue Line Investing (BLI) is a disciplined, rules-based investment process that attempts to identify the primary trend within the financial markets. The process uses technical analysis, trend-following, and historical pattern recognition to define the primary trend as either positive, neutral, or negative. Once identified, all investment-related decisions are aligned with that trend. BLI is an alternative to traditional, passive investing, in that it attempts to help investors save time and money over a full market cycle, through strategic changes within our strategies as primary trends change within the financial markets.

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 Blue Line Investing. The opinions referenced are as of the date of publication and are subject to change without notice. Blue Line Investing 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 Gordon Asset Management, LLC (GAM). GAM is an SEC-registered investment adviser. 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 (866) 216-1920. The principle office of Gordon Asset Management, LLC is located at 1007 Slater Road, Suite 200, Durham, North Carolina, 27703. GOR-1901-1

The BLUE LINE INVESTING® Primary Trend Update

Chart courtesy of StockCharts.com

Commentary:

The US stock market, as measured by the S&P 500 Index¹ (S&P) finished the month of November essentially at the Blue Line, down from 1.60% above the Blue Line at the end of October. With the S&P currently at the Blue Line, and having rallied from underneath the Blue Line, we continue to categorize the primary trend as Neutral.

Technically speaking, the 2,800 price level on the S&P appears significant. If the S&P can rise through that price level, it is possible the market may continue to rally to test the October highs. If however, it fails to rise above and hold above 2,800, the current price “bounce” may prove short-lived. Based on what is being observed at the present time, I am more inclined to begin looking for opportunities to add protective hedges to some of the BLUE LINE INVESTING® strategies as a precaution in the near-term. (Author’s note: this article was written and submitted for compliance approval Monday morning, December 3rd).

For clients of BLUE LINE INVESTING®, please feel free to call me at (833) 258-2583 if you would like to further understand how we use protective hedges, and when used, their potential impact to strategy performance.

Jeff Link

 

Disclaimers:

Blue Line Investing (BLI) is a disciplined, rules-based investment process that attempts to identify the primary trend within the financial markets. The process uses technical analysis, trend-following, and historical pattern recognition to define the primary trend as either positive, neutral, or negative. Once identified, all investment-related decisions are aligned with that trend. BLI is an alternative to traditional, passive investing, in that it attempts to help investors save time and money over a full market cycle, through strategic changes within our strategies as primary trends change within the financial markets.

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.

The volatility (beta) of an account may be greater or less than that of an index. It is not possible to invest directly in an 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 Blue Line Investing. The opinions referenced are as of the date of publication and are subject to change without notice. Blue Line Investing 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. This information is intended for educational purposes only. Forward looking statements cannot be guaranteed.

Advisory services offered through Gordon Asset Management, LLC (GAM). GAM is an SEC-registered investment adviser. 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 (866) 216-1920. The principle office of Gordon Asset Management, LLC is located at 1007 Slater Road, Suite 200, Durham, North Carolina, 27703.

The BLUE LINE INVESTING® Primary Trend Update

Commentary:

The US stock market, as measured by the S&P 500 Index¹ (S&P) finished the month of October closing 1.60% below the Blue Line, down from 6.00% above the Blue Line at the end of September. With the S&P declining below the Blue Line we now categorize the primary trend as Neutral.

Last month we commented that “If history continues to repeat, we believe the Blue Line will help inform us again when this positive primary trend in the US stock markets may be coming to an end…whenever that may be in the future.” With this month’s price decline exceeding the Blue Line by over 5% we now have our first Phase 1: WARNING in almost three years. This warning is just that – a warning. It does not require any action now. But it warns us to pay close attention to whether price can rally back up to and through the Blue Line in the near future.

For a summary description of the 3 phases of our Sell Process, please click here and turn to page 7 of the Case Study of the S&P 500 Index at the bottom of the webpage.

Jeff Link

 

Disclaimers:

Blue Line Investing (BLI) is an alternative to traditional wealth management. BLI uses a disciplined, rules-based investment process to seek investment opportunities, regardless of whether financial markets are rising or falling. Based on technical analysis research, the process applies trend-following along with observations of economic moving averages of the market and other technical indicators.

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.

The volatility (beta) of an account may be greater or less than that of an index. It is not possible to invest directly in an 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 Blue Line Investing. The opinions referenced are as of the date of publication and are subject to change without notice. Blue Line Investing 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. This information is intended for educational purposes only. Forward looking statements cannot be guaranteed.

Advisory services offered through Gordon Asset Management, LLC (GAM). GAM is an SEC-registered investment adviser. 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 (866) 216-1920. The principle office of Gordon Asset Management, LLC is located at 1007 Slater Road, Suite 200, Durham, North Carolina, 27703.

The primary trend of the US stock market according to BLUE LINE INVESTING®

Commentary:

The US stock market, as measured by the S&P 500 Index² (S&P) finished the month of September closing 6.00% above the Blue Line, down from 6.81% at the end of August. With the S&P remaining above the Blue Line we continue to categorize the primary trend as Positive.

We consistently review a universe of over 500 Exchange-Traded Funds (ETFs) to both search for new potential investment opportunities as well as to monitor the primary trend for several asset classes, which include: US stocks, International stocks, Commodities, Currencies, and Bonds (Fixed Income). We find it interesting that currently, and speaking in general, the US stock market appears to be in a positive primary trend; International stocks and Bonds appear to be in neutral primary trends; and Commodities and many Currencies are in negative primary trends. In other words, it appears capital continues to flow into the US markets at the expense of other financial markets, even those that may be considered less expensive. Investors who claim the US stock markets are “too expensive” might ask themselves a question – “Compared to what?”

History has taught us that “expensive” investments can continue to rise and become even more “expensive” for quite some time. And “cheap” investments can continue to suffer additional financial losses and become “cheaper” longer than expected. This is where we believe the “Blue Line” can be beneficial. It acts as a reference point to help determine the primary trend of an investment, when one can be identified, and when the trend may be changing. It helps remove personal bias and opinion to allow for more objective interpretation. If history continues to repeat, we believe the Blue Line will help inform us again when this positive primary trend in the US stock markets may be coming to an end…whenever that may be in the future.

Jeff Link

 

Disclaimers:

¹ Blue Line Investing (BLI) is an alternative to traditional wealth management. BLI uses a disciplined, rules-based investment process to seek investment opportunities, regardless of whether financial markets are rising or falling. Based on technical analysis research, the process applies trend-following along with observations of economic moving averages of the market and other technical indicators.

² 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.

The volatility (beta) of an account may be greater or less than that of an index. It is not possible to invest directly in an 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 Blue Line Investing. The opinions referenced are as of the date of publication and are subject to change without notice. Blue Line Investing 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. This information is intended for educational purposes only. Forward looking statements cannot be guaranteed.

Advisory services offered through Gordon Asset Management, LLC (GAM). GAM is an SEC-registered investment adviser. 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 (866) 216-1920. The principle office of Gordon Asset Management, LLC is located at 1007 Slater Road, Suite 200, Durham, North Carolina, 27703.

The primary trend of the US stock market according to BLUE LINE INVESTING®

Chart courtesy of StockCharts.com

Commentary:

The US stock market, as measured by the S&P 500 Index² (S&P) finished the month of August closing 6.81% above the Blue Line, up from 5.11% at the end of July. With the S&P remaining above the Blue Line we continue to categorize the primary trend as Positive.

We believe a question investors should ask themselves is which index is the true leader of the US stock markets? According to Armstrong Economics, the Dow Jones Industrial Average³ (DJIA) represents international investors, the S&P represents domestic investors, and the NASDAQ⁴ represents retail investors. Of the three, the DJIA is the only one that has so far failed to break out to a new high. So, are the S&P and NASDAQ the true leaders? Or is it the DJIA which, at this moment, may be hinting at potential caution? We will likely find out in a matter of time.

Until then, we also find it interesting to observe that the Dow Jones Transportation Average⁵ has broken out to new high without the DJIA, resulting in a Dow Theory non-confirmation.

We believe it is currently prudent for investors to hold on to their existing investments but continue to be cautious with new cash purchases until the market paints a clearer picture of the true leader – and resulting trend – for this market.

Jeff Link

 

Disclaimers:

¹ Blue Line Investing (BLI) is an alternative to traditional wealth management. BLI uses a disciplined, rules-based investment process to seek investment opportunities, regardless of whether financial markets are rising or falling. Based on technical analysis research, the process applies trend-following along with observations of economic moving averages of the market and other technical indicators.

² 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.

³ The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange (NYSE) and the Nasdaq.

⁴ The NASDAQ is a global electronic marketplace for buying and selling securities, as well as the benchmark index for U.S. technology stocks.

⁵ The Dow Jones Transportation Average is a price-weighted average of 20 transportation stocks traded in the United States.

The volatility (beta) of an account may be greater or less than that of an index. It is not possible to invest directly in an 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 Blue Line Investing. The opinions referenced are as of the date of publication and are subject to change without notice. Blue Line Investing 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. This information is intended for educational purposes only.

Advisory services offered through Gordon Asset Management, LLC (GAM). GAM is an SEC-registered investment adviser. 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 (866) 216-1920. The principle office of Gordon Asset Management, LLC is located at 1007 Slater Road, Suite 200, Durham, North Carolina, 27703.

The primary trend of the US stock market according to BLUE LINE INVESTING®

Chart courtesy of StockCharts.com

Commentary for month ending July 2018:

The US stock market, as measured by the S&P 500 Index² (S&P) finished the month of July closing +5.11% above the Blue Line, up from 2.53% at the end of June. With the S&P remaining above the Blue Line we continue to categorize the primary trend as Positive.

We believe the 2,800 price level on the S&P is currently important and failure to hold above this price may indicate continued consolidation. A couple other notable US stock market indices are not breaking out to new highs yet so until all major indices do so in unison we do not believe new highs are likely – yet. But with price activity remaining solidly above the Blue Line this year we currently believe it may only be a matter of time before new highs occur.

Jeff Link

 

Disclaimers:

¹ Blue Line Investing (BLI) is an alternative to traditional wealth management. BLI uses a disciplined, rules-based investment process to seek investment opportunities, regardless of whether financial markets are rising or falling. Based on technical analysis research, the process applies trend-following along with observations of economic moving averages of the market and other technical indicators.

² 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 Blue Line Investing. The opinions referenced are as of the date of publication and are subject to change without notice. Blue Line Investing 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. This information is intended for educational purposes only.

Advisory services offered through Gordon Asset Management, LLC (GAM). GAM is an SEC-registered investment adviser. 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 (866) 216-1920. The principle office of Gordon Asset Management, LLC is located at 1007 Slater Road, Suite 200, Durham, North Carolina, 27703.

The primary trend of the US stock market according to BLUE LINE INVESTING™

Commentary for month ending June 2018:

The US stock market, as measured by the S&P 500 Index (S&P) finished the month of June closing +2.53% above the Blue Line, almost unchanged from 2.94% at the end of April. With the S&P remaining above the Blue Line we continue to categorize the primary trend as Positive.

As can be seen from the chart above, the S&P has made little progress this calendar year and is currently near where it began. But the one constant – at least so far – has been price remaining above the Blue Line. In addition to the S&P, of the 20 investments currently owned within the Blue Line Investing STOCK Strategy, only 2 have recently dropped below their Blue Line’s by more than 5%,  signaling a Phase 1: WARNING. We will continue to monitor those investments closely, and if necessary, apply our sell process to remove them in attempt to limit further financial loss in accord with our sell process.

For clients of the BLUE LINE INVESTING™ strategies we thank you for your continued trust and confidence, and wish all readers of these posts a safe and fun 4th of July holiday.

Jeff Link

Disclaimers:

Blue Line Investing (BLI) is an alternative to traditional wealth management. BLI uses a disciplined, rules-based investment process to seek investment opportunities, regardless of whether financial markets are rising or falling. Based on technical analysis research, the process applies trend-following along with observations of economic moving averages of the market and other technical indicators.

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 Blue Line Investing. The opinions referenced are as of the date of publication and are subject to change without notice. Blue Line Investing 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. This information is intended for educational purposes only.

Advisory services offered through Gordon Asset Management, LLC (GAM). GAM is an SEC-registered investment adviser. 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 (866) 216-1920. The principle office of Gordon Asset Management, LLC is located at 1007 Slater Road, Suite 200, Durham, North Carolina, 27703.

The Primary Trend of the US Stock Market according to BLUE LINE INVESTING™ ‚¹

Commentary for month ending May 2018:

The US stock market, as measured by the S&P 500 Index² (S&P) finished the month of May closing +2.94% above the Blue Line, slightly higher from 1.47% at the end of April. With the S&P remaining above the Blue Line we continue to categorize the primary trend as Positive.

Do you wonder why we are so obsessed about monitoring price in relation to the Blue Line? It’s because since 1926 there have been 34 instances when price dropped below the Blue Line by at least 5%, or what we call a Phase 1: WARNING. Of those 34 instances, 20 became what we call Phase 2: FAILURES. Of those 20 instances, 9 became what we call Phase 3: CONFIRMATIONS. In other words, Phase 1’s became Phase 2’s 59% of the time, and Phase 2’s become Phase 3’s 45% of the time. Of these 9 historical occurrences, from the time when price first dropped below the Blue Line to the eventual end of the decline, the price decline has averaged -38.1%

What we find most interesting is in almost every one of the 9 historical occurrences the stock market decline followed the same pattern. We believe Warren Buffett said it best, “Rule No. 1: Don’t lose money. Rule No. 2: Never forget Rule No. 1.” While the BLUE LINE INVESTING™ process can not predict the future, it can help identify the early stages of the historical pattern that has coincided with significant stock market price declines. Following this process is how we attempt to follow the wise advice quoted above from the Oracle of Omaha. So our advice is simple – pay close attention to the price of most publicly traded investments in relation to the Blue Line.

Thanks for reading.

Jeff Link

 

Disclaimers:

¹ Blue Line Investing (BLI) is an alternative to traditional wealth management. BLI uses a disciplined, rules-based investment process to seek investment opportunities, regardless of whether financial markets are rising or falling. Based on technical analysis research, the process applies trend-following along with observations of economic moving averages of the market and other technical indicators.

² 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 Blue Line Investing. The opinions referenced are as of the date of publication and are subject to change without notice. Blue Line Investing 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. This information is intended for educational purposes only.

Advisory services offered through Gordon Asset Management, LLC (GAM). GAM is an SEC-registered investment adviser. 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 (866) 216-1920. The principle office of Gordon Asset Management, LLC is located at 1007 Slater Road, Suite 200, Durham, North Carolina, 27703.

BLI Market View, April 2018

The primary trend of the US stock market according to BLUE LINE INVESTING™ ‚¹

Commentary for month ending April 2018:

The US stock market, as measured by the S&P 500 Index² (S&P) finished the month of April closing +1.47% above the Blue Line, almost unchanged from 1.58% at the end of March. With the S&P remaining above the Blue Line we continue to categorize the primary trend as Positive.

In a recent article entitled Are Price Movements in the Stock Market Random? (click here), we illustrated a potential descending wedge on the weekly charts. According to technical analysis this could be a positive formation suggesting higher prices soon. We believe by observing the market from different periods of time a clearer picture may emerge for how to set our expectations as investors. This technical formation continues to be in play and if prices continue to decline over the coming days to the 2,575 price level on the S&P, we believe this price level represents a preferred entry point for our clients with cash on hand or who are making their initial investments into the BLI strategies. While there are no guarantees the market will decline to this level, or even continue to decline lower if it does, we believe it is an acceptable price level to purchase select financial investments.

Thanks for reading.

Jeff Link

 

Disclaimers:

¹ Blue Line Investing (BLI) is an alternative to traditional wealth management. BLI uses a disciplined, rules-based investment process to seek investment opportunities, regardless of whether financial markets are rising or falling. Based on technical analysis research, the process applies trend-following along with observations of economic moving averages of the market and other technical indicators.

² 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 Blue Line Investing. The opinions referenced are as of the date of publication and are subject to change without notice. Blue Line Investing 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. This information is intended for educational purposes only.

Advisory services offered through Gordon Asset Management, LLC (GAM). GAM is an SEC-registered investment adviser. 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 (866) 216-1920. The principle office of Gordon Asset Management, LLC is located at 1007 Slater Road, Suite 200, Durham, North Carolina, 27703.

BLI Market View, March 2018

The BLUE LINE INVESTING™ (BLI)¹ Market View of the US stock market for the month ending March 2018

Commentary:

The S&P 500 Index  (S&P) finished the month of March closing +1.58% above the Blue Line, noticeably lower from 5.36% at the end of February. With the S&P remaining above the Blue Line we continue to categorize the primary trend as Positive.

In last month’s commentary we shared our belief that the price correction may not be over and that a retest of the recent February price low may be forthcoming. So far that belief appears to be playing out. From a historical perspective only, we believe probabilities now favor a break in price below the Blue Line. For investors who have kept cash on the sidelines, or who raised cash within their investment strategies within recent months, this may create an opportunity to invest that cash at what we believe could be favorable prices.

Thanks for reading.

Jeff Link

 Disclaimers:

¹ Blue Line Investing (BLI) is an alternative to traditional wealth management. BLI uses a disciplined, rules-based investment process to seek investment opportunities, regardless of whether financial markets are rising or falling. Based on technical analysis research, the process applies trend-following along with observations of economic moving averages of the market and other technical indicators.

² 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 Blue Line Investing. The opinions referenced are as of the date of publication and are subject to change without notice. Blue Line Investing 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. This information is intended for educational purposes only.

Advisory services offered through Gordon Asset Management, LLC (GAM). GAM is an SEC-registered investment adviser. 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 (866) 216-1920. The principle office of Gordon Asset Management, LLC is located at 1007 Slater Road, Suite 200, Durham, North Carolina, 27703.

BLI Market View, February 2018

The BLUE LINE INVESTING™ (BLI)¹ Market View of the

 S&P 500 Index² for the month ending February 2018

Commentary:

The S&P 500 Index (S&P) finished the month of February closing 5.36% above the Blue Line, over five percent lower from 10.81% at the end of January. With the S&P remaining above the Blue Line we continue to categorize the primary trend as Positive.

The price “correction” that occurred last month appears suspicious in that while the S&P touched the Blue Line on the sharp selloff  – albeit very briefly –  two other noteworthy US stock indices did not. Experience has taught us to be cautious when major indices diverge. At present it appears the stock market “correction” is not over and the market very well may retest the recent lows in the days or weeks to come.

Even if it does, according to our process the market has not signaled a change in trend…yet.

Thanks for reading.

Jeff Link

  

Disclaimers:

Chart courtesy of StockCharts.com.

¹ Blue Line Investing (BLI) is an alternative to traditional wealth management. BLI uses a disciplined, rules-based investment process to seek investment opportunities, regardless of whether financial markets are rising or falling. Based on technical analysis research, the process applies trend-following along with observations of economic moving averages of the market and other technical indicators.

 ² 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 Blue Line Investing. The opinions referenced are as of the date of publication and are subject to change without notice. Blue Line Investing 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. This information is intended for educational purposes only.

Advisory services offered through Gordon Asset Management, LLC (GAM). GAM is an SEC-registered investment adviser. 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 (866) 216-1920. The principle office of Gordon Asset Management, LLC is located at 1007 Slater Road, Suite 200, Durham, North Carolina, 27703.

BLI Market View, January 2018

The BLUE LINE INVESTING™ (BLI)¹ Market View of the

 S&P 500 Index² for the month ending January 2018

Commentary:

The S&P 500 Index (S&P) finished the month of January closing 10.81% above the Blue Line, almost 4% higher from 7.32% at the end of December. With the S&P remaining above the Blue Line we continue to categorize the primary trend as Positive. However…

…since 1980, it has been very common for prices to “correct” in price back towards the Blue Line from elevated levels. This is commonly referred to as reversion to the mean. As #RichardRussell of #DowTheoryLetters use to say, the market sometimes acts like a rubber band. As prices advance, trending higher and higher, the rubber band stretches out. But once let go, the rubber band snaps back to its normal state. For us, the normal state or mean of the market is the Blue Line.

Are we at a point now where the stock market, like the rubber band, may snap back? Or could the market produce even higher elevated levels before it forms a top? Time will tell. But we have only found a handful of times since 1980 when price exceeded the Blue Line in excess of the current 10.81% before ultimately correcting back to the Blue Line.

Thanks for reading.

Jeff Link

Disclaimers:

¹ Blue Line Investing (BLI) is an alternative to traditional wealth management. BLI uses a disciplined, rules-based investment process to seek investment opportunities, regardless of whether financial markets are rising or falling. Based on technical analysis research, the process applies trend-following along with observations of economic moving averages of the market and other technical indicators.

² 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 Blue Line Investing. The opinions referenced are as of the date of publication and are subject to change without notice. Blue Line Investing 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. This information is intended for educational purposes only.

Advisory services offered through Gordon Asset Management, LLC (GAM). GAM is an SEC-registered investment adviser. 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 (866) 216-1920. The principle office of Gordon Asset Management, LLC is located at 1007 Slater Road, Suite 200, Durham, North Carolina, 27703.