BLI Market View, December 2017

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

 S&P 500 Index² for the month ending December 2017

Commentary:

The S&P 500 Index (S&P) finished the month of December closing +7.32% above the Blue Line, almost unchanged from 7.95% at the end of November. With the S&P remaining above the Blue Line we continue to categorize the primary trend as Positive.

Calendar year 2017 was very unique in our opinion. Since 1980, there have only been 3 other calendar years – 1989, 1995, 2013 – when the S&P did not test the Blue Line during the calendar year. This suggests to us the probability of the S&P testing the Blue Line during calendar year 2018 is high.

Therefore, we do not believe a price correction of at least 7% (based on current prices) should be surprising to investors, if one occurs. Our process pays close attention to these metrics to help determine when to consider adding protective hedges to existing client strategies, as well as to help identify preferred purchase prices when investing new money into the stock market.

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, November 2017

The Blue Line Investing (BLI)¹ Market View of the

 S&P 500 Index² for the month ending November 2017

Commentary:

The S&P 500 Index (S&P) finished the month of November closing +7.95% above the Blue Line, over one percent higher from 6.44% at the end of October. With the S&P remaining above the Blue Line we continue to categorize the primary trend as Positive.

To regular readers of this article series you have likely noticed we reference the percentage difference between price and the Blue Line. We do this as one means of measuring what we believe to be the premium or discount of the S&P (or any other investment we are monitoring) at that moment. As the premium increases over time (as it has been throughout this year) we perceive that risk is increasing. Remember, investors make their money on the purchase decision. If you overpay for something – no matter what it is – you will usually end up losing money.

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, October 2017

The Blue Line Investing (BLI)¹ Market View of the

 S&P 500 Index² for the month ending October 2017

Commentary:

The S&P 500 Index (S&P) finished the month of October closing +6.44% above the Blue Line, almost one percent higher from 5.62% at the end of September. With the S&P remaining above the Blue Line we continue to categorize the primary trend as Positive.

Twelve months have now passed since the S&P last “tested” the Blue Line. There has now only been 4 other times since 1980 when the gap between “tests” was longer:

October 1992 – March 1994: 18 months

January 1995 – July 1996: 18 months

November 2012 – October 2014: 23 months

At present we believe calendar year 2017 seems to be “behaving” very similarly to 1995. If time permits, we hope to issue a special “Technically Speaking” article to illustrate visually what we mean by that statement. For those who do not recall 1995, that year marked the first of 5 strong years in the stock market that culminated in the stock market doubling in value from 1995 through the stock market peak in 2000. While the past is never indicative of the future, I eagerly anticipate what the future may hold if the markets “behavior” mirrors the past.

Thanks for reading.

Jeff Link

 Disclaimers:

¹ Blue Line Investing (BLI) is a disciplined investment process, based on technical analysis research. The process applies trend-following, along with observations of the moving averages of the market. Key to the process is the “blue line”, which is derived from comparing an investment’s price against its moving average. BLI monitors those activities over time in order to determine allocations within client accounts.

 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, September 2017

The Blue Line Investing (BLI)¹ Market View of the

 S&P 500 Index² for the month ending September 2017

 

Commentary:

The S&P 500 Index (S&P) finished the month of August closing +5.62% above the Blue Line, almost one percent higher from 4.66% at the end of August. With the S&P remaining above the Blue Line we continue to categorize the primary trend as Positive.

Last month the Dow Theory “non-confirmation” was negated when the Dow Jones Transportation Average³ rose to a new high, confirming the new high in the Dow Jones Industrial Average⁴. In addition, all previous negative divergences that were observed in the major U.S. stock market indices during September have also been negated. This does not mean a correction cannot, or will not occur; but rather, the immediate concern has lessened.

Eleven months have now passed since the S&P last “tested” the Blue Line. There have only been 4 other times since 1980 when the gap between “tests” was longer:

May 2003 – May 2004: 12 months

October 1992 – March 1994: 18 months

January 1995 – July 1996: 18 months

November 2012 – October 2014: 23 months

As a reminder to our Blue Line Investing clients, the Blue Line represents our preferred price point when making an initial or additional purchase to an investment.

Thanks for reading.

Jeff Link

Disclaimers:

¹ Blue Line Investing (BLI) is a disciplined investment process, based on technical analysis research. The process applies trend-following, along with observations of the moving averages of the market. Key to the process is the “blue line”, which is derived from comparing an investment’s price against its moving average. BLI monitors those activities over time in order to determine allocations within client accounts.

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

⁴ The Dow Jones Industrial Average (DJIA) is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange (NYSE) and the NASDAQ.

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, August 2017

The Blue Line Investing (BLI)¹ Market View of the

 S&P 500 Index² for the month ending August 2017

Commentary:

The S&P 500 Index (S&P) finished the month of August closing +4.66% above the Blue Line, almost one percent lower from 5.69% at the end of July. With the S&P remaining above the blue line we continue to believe the primary trend to be Positive; however

Last month we referenced the potential of a Dow Theory “non confirmation” which continues at present. In addition, we have begun to witness multiple potential negative divergences within the major stock indices, along with a potential positive divergence within the volatility sector. If these divergences come to pass they may imply a change in trend. Since recent trends have been positive, we would expect the trend to turn negative – at least temporarily. While no one can determine in advance how deep a price correction may fall or how long it may last, we are hopeful our process will assist us with taking proactive action in advance to help reduce potential downside price volatility in the short-term.

In accordance with our process we have already begun to sell what we view to be non-essential investments within the Blue Line Investing stock strategies to buy both cash equivalents and a few inverse exchange-traded funds (ETF’s) that we believe will serve as protective hedges. If warranted we intend to add to these protective hedges sooner rather than later.

Thanks for reading.

Jeff Link

 Disclaimers:

¹ Blue Line Investing (BLI) is a disciplined investment process, based on technical analysis research. The process applies trend-following, along with observations of the moving averages of the market. Key to the process is the “blue line”, which is derived from comparing an investment’s price against its moving average. BLI monitors those activities over time in order to determine allocations within client accounts.

 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, July 2017

The BLI Market View of the S&P 500 Index¹

for the month ending July 2017

Commentary:

The S&P 500 Index (S&P) finished the month of July closing +5.69% above the Blue Line, almost one percent higher from 4.85% at the end of June. According to our process, the S&P would have to decline below the Blue Line to approximately 2,220 for us to proclaim a Phase 1: WARNING of a possible change in trend. For now, we believe the primary trend of the S&P continues to be Positive.

Last month we were monitoring a few indicators that could have been warning of a pending short-term price correction in the stock markets. Those particular warnings have since been negated, but now we are observing something new. While the Dow Jones Industrial Average⁶ has advanced to all-time highs, the Dow Jones Transportation Index⁷ has not. This is called a Dow Theory “non confirmation.” Historically, when the stock market is considered healthy, it is expected that both these indices rise together. When they begin to diverge in price it could be an early warning of a price correction to come. In due time, the Transports may rally to confirm the new high in the Dow, or the non-confirmation may continue. While we typically avoid making investment decisions based on only one potential indicator we will continue to look for any additional witnesses that might provide greater credibility to the current non-confirmation.

Thanks for reading.

Disclaimers:

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.

² Blue Line Investing (BLI) is a disciplined investment process, based on technical analysis research. The process applies trend-following, along with observations of the moving averages of the market. Key to the process is the “blue line”, which is derived from comparing an investment’s price against its moving average. BLI monitors those activities over time in order to determine allocations within client accounts.

³ According to Blue Line Investing, once the price of any publicly-traded investment falls below the blue line, the trend is considered “neutral” and could become “negative.” As such, a Phase 1: WARNING, means, by dropping below the blue line, the market is providing a “warning” of distribution.

⁴ According to Blue Line Investing, once the price of any publicly-traded investment fails to rally and remain above the blue line, it is a signal from the market that selling pressure is greater than buying pressure. This results in a Phase 2: FAILURE, representing the markets “failure” to re-establish a trend above the blue line. The probability of a change in trend is higher.

⁵ According to Blue Line Investing, once the price of any publicly-traded investment fails to rally and remain above the blue line on any second rally attempt, this results in a Phase 3: CONFIRMATION – it is “confirmation” from the market that the trend has changed to negative and investors should expect losses for an indeterminate period of time.

⁶ The Dow Jones Industrial Average (DJIA) is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange (NYSE) and the NASDAQ.

⁷ The Dow Jones Transportation Average is a price-weighted average of 20 transportation stocks traded in the United States.

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, June 2017

The BLI Market View of the S&P 500 Index¹

for the month ending June 2017

Chart courtesy of StockCharts.com

Commentary:

The S&P 500 Index (S&P) finished the month of June closing +4.85% above the Blue Line, almost one percent lower from 5.7% at the end of May. According to our process, the S&P would have to decline below the Blue Line to approximately 2,195 for us to proclaim a Phase 1: WARNING of a possible change in trend. For now, we believe the primary trend of the S&P continues to be Positive.

It appears the S&P may now “test” the previous resistance zone of 2,400 (reference the gray dashed line “A” above). Failure to hold 2,400 could result in the S&P dropping towards the Blue Line around 2,311. Based on several other markets we are closely monitoring we would not be surprised to see prices correct to that price level. Regardless, of any near-term correction, we do not observe any evidence of a major stock market top at this time.

Thanks for reading and we hope you had a Happy 4th of July .

Disclaimers:

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.

² Blue Line Investing (BLI) is a disciplined investment process, based on technical analysis research. The process applies trend-following, along with observations of the moving averages of the market. Key to the process is the “blue line”, which is derived from comparing an investment’s price against its moving average. BLI monitors those activities over time in order to determine allocations within client accounts.

³ According to Blue Line Investing, once the price of any publicly-traded investment falls below the blue line, the trend is considered “neutral” and could become “negative.” As such, a Phase 1: WARNING, means, by dropping below the blue line, the market is providing a “warning” of distribution.

⁴ According to Blue Line Investing, once the price of any publicly-traded investment fails to rally and remain above the blue line, it is a signal from the market that selling pressure is greater than buying pressure. This results in a Phase 2: FAILURE, representing the markets “failure” to re-establish a trend above the blue line. The probability of a change in trend is higher.

⁵ According to Blue Line Investing, once the price of any publicly-traded investment fails to rally and remain above the blue line on any second rally attempt, this results in a Phase 3: CONFIRMATION – it is “confirmation” from the market that the trend has changed to negative and investors should expect losses for an indeterminate period of time.

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, May 2017

The BLI Market View of the S&P 500 Index¹

for the month ending May 2017

Commentary:

The S&P 500 Index (S&P) finished the month of May closing +5.7% above the Blue Line, almost unchanged from 5.5% at the end of April. According to our process, the S&P would have to decline below the Blue Line to approximately 2,166 for us to proclaim a Phase 1: WARNING of a possible change in trend. For now, we believe the primary trend of the S&P continues to be Positive.

It appears the S&P may now be trading within a trend channel capped on the upside around 2,400 (see dashed gray line “A”) and supported on the downside around 2,325 (see dashed gray line “B”). The recent breakout above 2,400 may be what is called a “bear trap” where price breaks out, only to quickly fall back inside the trend channel. If this is so, investors should expect further consolidation, or possibly a price correction in the coming days or possibly weeks.

Thanks for reading.

Disclaimers:

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.

² Blue Line Investing (BLI) is a disciplined investment process, based on technical analysis research. The process applies trend-following, along with observations of the moving averages of the market. Key to the process is the “blue line”, which is derived from comparing an investment’s price against its moving average. BLI monitors those activities over time in order to determine allocations within client accounts.

³ According to Blue Line Investing, once the price of any publicly-traded investment falls below the blue line, the trend is considered “neutral” and could become “negative.” As such, a Phase 1: WARNING, means, by dropping below the blue line, the market is providing a “warning” of distribution.

⁴ According to Blue Line Investing, once the price of any publicly-traded investment fails to rally and remain above the blue line, it is a signal from the market that selling pressure is greater than buying pressure. This results in a Phase 2: FAILURE, representing the markets “failure” to re-establish a trend above the blue line. The probability of a change in trend is higher.

⁵ According to Blue Line Investing, once the price of any publicly-traded investment fails to rally and remain above the blue line on any second rally attempt, this results in a Phase 3: CONFIRMATION – it is “confirmation” from the market that the trend has changed to negative and investors should expect losses for an indeterminate period of time.

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 2017

The BLI Market View of the S&P 500 Index¹

for the month ending April 2017

Commentary:

The S&P 500 Index (S&P) finished the month of April closing 5.5% above the Blue Line, almost unchanged from 5.6% at the end of March. According to our process, the S&P would have to decline below the Blue Line to approximately 2,140 for us to proclaim a Phase 1: WARNING of a possible change in trend. For now, we believe the primary trend of the S&P continues to be Positive.

Based on technical analysis only, it appears the S&P is now trading within a trend channel capped on the upside around 2,400 and supported on the downside around 2,325. Once price breaks out above or below either of these numbers we should have a better idea of the near-term direction of the market.

Thanks for reading.

Disclaimers:

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.

² Blue Line Investing (BLI) is a disciplined investment process, based on technical analysis research. The process applies trend-following, along with observations of the moving averages of the market. Key to the process is the “blue line”, which is derived from comparing an investment’s price against its moving average. BLI monitors those activities over time in order to determine allocations within client accounts.

³ According to Blue Line Investing, once the price of any publicly-traded investment falls below the blue line, the trend is considered “neutral” and could become “negative.” As such, a Phase 1: WARNING, means, by dropping below the blue line, the market is providing a “warning” of distribution.

⁴ According to Blue Line Investing, once the price of any publicly-traded investment fails to rally and remain above the blue line, it is a signal from the market that selling pressure is greater than buying pressure. This results in a Phase 2: FAILURE, representing the markets “failure” to re-establish a trend above the blue line. The probability of a change in trend is higher.

⁵ According to Blue Line Investing, once the price of any publicly-traded investment fails to rally and remain above the blue line on any second rally attempt, this results in a Phase 3: CONFIRMATION – it is “confirmation” from the market that the trend has changed to negative and investors should expect losses for an indeterminate period of time.

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 2017

The BLI Market View of the S&P 500 Index¹

for the month ending March 2017

Commentary:

The S&P 500 Index (S&P) finished the month of March closing 5.6% above the Blue Line, slightly down from 7.1% at the end of February. According to our process, the S&P would have to decline below the Blue Line to approximately 2,120 for us to proclaim a Phase 1: WARNING of a possible change in trend. For now, we believe the primary trend of the S&P continues to be Positive.

Based on technical analysis only, we are currently monitoring what we believe are two short-term potential scenarios. The potential positive scenario is for the S&P to continue consolidating recent gains in a controlled manner with price dropping down to – but holding – the 2,300 level. If that price level holds we expect the S&P to rally thereafter. The potential negative scenario is for the S&P to continue to weaken and break through the 2,300 level which could lead to a larger price correction.

In either case, we are not currently observing any technical indications that would lead us to believe the S&P has “topped”…yet. Thanks for reading.

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.

² Blue Line Investing (BLI) is a disciplined investment process, based on technical analysis research. The process applies trend-following, along with observations of the moving averages of the market. Key to the process is the “blue line”, which is derived from comparing an investment’s price against its moving average. BLI monitors those activities over time in order to determine allocations within client accounts.

³ According to Blue Line Investing, once the price of any publicly-traded investment falls below the blue line, the trend is considered “neutral” and could become “negative.” As such, a Phase 1: WARNING, means, by dropping below the blue line, the market is providing a “warning” of distribution.

⁴ According to Blue Line Investing, once the price of any publicly-traded investment fails to rally and remain above the blue line, it is a signal from the market that selling pressure is greater than buying pressure. This results in a Phase 2: FAILURE, representing the markets “failure” to re-establish a trend above the blue line. The probability of a change in trend is higher.

⁵ According to Blue Line Investing, once the price of any publicly-traded investment fails to rally and remain above the blue line on any second rally attempt, this results in a Phase 3: CONFIRMATION – it is “confirmation” from the market that the trend has changed to negative and investors should expect losses for an indeterminate period of time.

Disclaimers:

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 2017

The BLI Market View of the S&P 500 Index¹

for the month ending February 2017

BLI February 2017

Commentary:

The US Stock Market continues to rally. By comparing the closing price of the S&P 500 Index (S&P) for February to its Blue Line, we can observe that price is approximately 7.1% higher than the Blue Line. This means, according to our process, that price could “correct” by that much, or slightly more, without us being concerned about a change in the primary trend. For now, we consider the primary trend to be positive.

One thing to keep in mind however is the relationship between price and the Blue Line over time. We will use a rubber band for analogy. As a rubber band is stretched out the tension rises. When it is let go, the rubber band snaps back to its normal state, thereby eliminating the tension. The stock market can sometimes behave in a similar manner. If prices rise at too fast a pace it is like the rubber band being stretched out. While the stock market does not have to “snap back” or “crash” to return to its normal state, we believe it is worth being mindful of, especially if new contributions to the market are being considered.

Thanks for reading.

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.

² Blue Line Investing (BLI) is a disciplined investment process, based on technical analysis research. The process applies trend-following, along with observations of the moving averages of the market. Key to the process is the “blue line”, which is derived from comparing an investment’s price against its moving average. BLI monitors those activities over time in order to determine allocations within client accounts.

³ According to Blue Line Investing, once the price of any publicly-traded investment falls below the blue line, the trend is considered “neutral” and could become “negative.” As such, a Phase 1: WARNING, means, by dropping below the blue line, the market is providing a “warning” of distribution.

⁴ According to Blue Line Investing, once the price of any publicly-traded investment fails to rally and remain above the blue line, it is a signal from the market that selling pressure is greater than buying pressure. This results in a Phase 2: FAILURE, representing the markets “failure” to re-establish a trend above the blue line. The probability of a change in trend is higher.

⁵ According to Blue Line Investing, once the price of any publicly-traded investment fails to rally and remain above the blue line on any second rally attempt, this results in a Phase 3: CONFIRMATION – it is “confirmation” from the market that the trend has changed to negative and investors should expect losses for an indeterminate period of time.

Disclaimers:

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 2017

The BLI Market View of the S&P 500 Index

for the month ending January 2017

January 2017

Commentary:

The chart above reflects the price of the S&P 500 Index (S&P) compared to its Blue Line. As can be observed, the past 2 years have resulted in a choppy market with a fair amount of price volatility up and down through the Blue Line. After almost 2 years of a range-bound market the S&P appears to have broken out into a potentially new Primary Positive Trend. As long as price remains above the Blue Line, we do not believe investors should fret over price volatility in the short term.

As a case in point, please reference the price of the index (#1) in relation to the Blue Line for the index (#2). At the present time, the S&P could fall almost 5% before touching the Blue Line. Should this occur, we believe it remains a simple price “correction.” In order for us to begin to become concerned about anything more significant, price would have to fall by over 10% from current levels to generate a “Phase 1: WARNING,” which would equate to a price level of approximately 2,050 on the S&P.

Thanks for reading.

Disclaimers:

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.

Blue Line Investing (BLI) is a disciplined investment process, based on technical analysis research. The process applies trend-following, along with observations of the moving averages of the market. Key to the process is the “blue line”, which is derived from comparing an investment’s price against its moving average. BLI monitors those activities over time in order to determine allocations within client accounts.

According to Blue Line Investing, once the price of any publicly-traded investment falls below the blue line, the trend is considered “neutral” and could become “negative.” As such, a Phase 1: WARNING, means, by dropping below the blue line, the market is providing a “warning” of distribution.

According to Blue Line Investing, once the price of any publicly-traded investment fails to rally and remain above the blue line, it is a signal from the market that selling pressure is greater than buying pressure. This results in a Phase 2: FAILURE, representing the markets “failure” to re-establish a trend above the blue line. The probability of a change in trend is higher.

According to Blue Line Investing, once the price of any publicly-traded investment fails to rally and remain above the blue line on any second rally attempt, this results in a Phase 3: CONFIRMATION – it is “confirmation” from the market that the trend has changed to negative and investors should expect losses for an indeterminate period of time.

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.