The Roller Coaster Ride Continues
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In our previous May 23rd Stock Market Update & Asbury Investment Management Video, entitled US Stocks At Important Inflection Point, we pointed out that our Asbury 6 tactical model had been on a Negative status since May 17th. Two weeks later, Table 1 below shows that the “A6” has since moved back to Positive, as of May 27th.
How To Interpret The Asbury 6: 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.
Meanwhile, the rightmost pink highlights in the chart below show that the benchmark S&P 500 (SPX) has been drifting sideways, in a wide range, since late April. This year’s choppy environment, including the one that took place just before it from late January to mid-March, is what my colleague Ken Tomko displays and discusses in his latest video update below. This chart, and the choppy movement in our Asbury 6 (which measures the day-to-day internal condition of the market), show a very uneasy, uncertain marketplace that has an overriding desire to “buy the dip”, no matter what.
You can see that “buy the dip” mentality very clearly by the five times that the 50-day moving average, a widely-watched major trend proxy, was tested and aggressively held this year. So, in our view, we have a stock market that, on a day-to-day basis, is very uncertain of just how much higher the S&P 500 can go after already rising an unbelievable 93% since last March — but also knows that the Fed has essentially promised to keep asset prices from significantly declining. So — in Pavlov’s dog fashion — the broad market index declines to the 50-day MA, the bell rings, and investors come back in with both feet just as they were trained to do.
One day this will change, and we believe it’s going to end badly — so we continue to follow our models, trying to protect our clients from the inevitable correction while also trying to capture as much of this historic rise as possible before the music stops.
Our latest video below shows how we have navigated these recent market conditions for client portfolios in real-time.
Asbury Investment Management (AIM): Our Latest Video
Asbury Research Ideas, Expertly Managed
Here is our May 21st 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.