S&P 500 Meets Our November Upside Target
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In our November 20th Stock Market Update & Asbury Investment Management Video, entitled Happy Holidays For Investors? Watch The Market’s Vital Signs, we pointed out that our Asbury 6 risk management model had shifted back to a Positive (bullish) status as of November 4th. We also pointed out our new upside target of 3850 in the benchmark S&P 500 (SPX).
Chart 1 below shows that our 3850 target was met last week, on January 20th, capturing an 8.2% rise in exactly 2 months.
The chart also shows that Primary underlying support now exists 3.8% below the market at SPX 3694, which is the current location of the 50-day moving average (a widely-watched minor trend proxy). The Nov 4th Tactical advance in SPX remains valid above this level. Major support exists 13.4% below the market at 3325. The May 27th Strategic advance remains valid above this level.
Meanwhile, Table 1 below shows that our Asbury 6 risk management model remains on a Positive (bullish) status as of Nov 4th.
The purpose of the “A6” is to be a daily check-up of the US stock market’s internal health, much like the initial part of your visit to the doctor’s office typically includes the same routine: the doctor takes your temperature, checks your blood pressure, takes your pulse, listens to your heart and lungs, and tests your reflexes. In the same way, the Asbury 6 checks price momentum, the relative performance of stocks versus bonds, investor asset flows, the bond market’s assessment of risk, trading volume, and market breadth. Both are repeatable routines that establish the baseline health of the “patient”, providing us with the latest information on how to better preserve, and enhance, our physical and financial health into the future.
How To Interpret The Asbury 6: The “A6” is updated daily in our Research Center (access requires subscription), including data through the previous day’s market close. Four or more metrics in one direction, either Positive (green) or Negative (red), indicate a tactical bias. The dates in each cell indicate when each individual constituent of the A6 turned either positive (green) or negative (red). When all Asbury 6 are positive, market internals are the most conducive to adding risk to portfolios. Each negative reading adds an additional element of risk to participating in current or new investment ideas.
We are paying especially close attention to the Asbury 6 right now because the US stock market is historically very over-extended, according to most technical and quantitative metrics. The next Negative reading in the “A6”, whenever it emerges, will let us and our clients know when to start “playing defense” and protecting recent market gains.
Our latest video below shows how we have navigated recent market conditions in real-time.
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Here is our January 22nd Video Review, which explains how we have recently utilized Asbury Research’s market analysis and investment ideas to professionally manage client portfolios.
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This communication is for informational purposes only. It is not intended as investment advice, or as an offer or solicitation for the purchase or sale of any financial asset. No inferences may be made and no guarantees of profitability are being stated by Asbury Research LLC. The risk of loss trading in financial assets can be substantial. Therefore, you should carefully consider whether such trading is suitable for you in light of your financial condition.