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Support levels on the major averages are intact, despite the decline in early March.  Technical indicators based on market breadth and volume is in the process of working off its overbought condition from the rise since the election.  In addition historical research shows after January and February are strong months; the year has the potential for additional gains. This doesn’t mean a short term decline will not occur, however the odds favor declines could be a buying opportunity.

The optimistic tone of the market has changed somewhat as the expectations of rising rates became a concern for investors.  The 10-year Treasury note yields have been rising steadily since the end of February spooking investors.  There has been an overall weakening in market breadth indicators that need to be monitored. Our stock market timing models remain neutral-positive indicating a potentially profitable market climate and further gains over the next several weeks.

The overall technical picture of the market remains positive. The cumulative advance decline line of the NYSE advance/decline line confirmed the highs made in February.   When market breadth confirms price, usually that suggests the final high has not been made.  The Technology sector is acting well. The NASDAQ 100 (QQQ) is not far from its recent all-time high.  It’s also bullish that the Nasdaq Composite is leading in relative strength vs the S&P 500, a condition which has historically overall characterized more profitable market climates.

Watch The Strength of Technology:

PowerShares QQQ ETF (Nasdaq 100 Index) Weekly Price and Trend Channels (Top), and MACD 12-26-9 (Bottom)

The top part of the chart shows the weekly Power Shares 100 (QQQ), an exchange-traded fund based on the Nasdaq 100 Index and its active trading channels.  The QQQ includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq stock market based on market capitalization. As of 03/10/17, Apple, (AAPL) is the largest holding comprising 11.91%, Microsoft Corp (MSFT) 8.11%, Amazon.com, Inc. (AMZN) 6.50%, Facebook, Inc. Class A (FB) 5.22%. Alphabet Inc. Class C (GOOG) 4.67% and Alphabet Inc. Class A (GOOGL) 4.11% totaling 40.52%.

The QQQ broke out at 123.00 (red circle above) on January 6 and has been steadily rising. The QQQ has now slightly penetrated the channel objective at 130.00 (top blue channel line), now trading at 131.30. The intermediate trend is up as long as the QQQ remains above the up trendline line (pink). The next upside target is 139.00.   Keep an eye on Apple, (AAPL) the largest holding of QQQ.   Apple has moved sideways for 10 days giving up no ground.  If Apple continues making new highs, this could be positive for the technology sector over the next several months.   If the QQQ falls below 123.00, breaking the up-trend, my bullish outlook would be negated.

The bottom half of the chart is MACD (12, 26, 9) a measure of momentum.  Its bullish MACD has confirmed the price high made in QQQ suggesting any weakness in the QQQ most likely would be temporary.

 

A Breakout in the S&P 500 ETF (SPY) is Possible?

The chart above is the weekly SPDR S&P 500 (SPY) ETF that is comprised of 500 stocks of the largest companies in the U.S.   The S&P 500 (SPY) hit its weekly upside channel on March 1st at 240.32 and pulled back.  Market breath has weakened however the SPY has not given up much ground over the last two weeks, a bullish sign.  If the SPY can get through the old highs, higher projections above 260.00 will be given.

The lower portion of the chart is the 12-26-9 MACD, a measure of momentum.  Like the QQQ discussed above, MACD has confirmed the price high in the SPY and is in a clear uptrend.  This is the sign of a healthy market.   Look for the SPY to at least test the old highs.

Summing Up:

Market breadth has been weak as of late after being very strong for many months. There has been no real thrust on the advancing days to get excited about, however not much ground has been given up either.  Market breath indicators have worked off its overbought condition since the election.   Our stock market timing models remain neutral-positive indicating a potentially profitable market climate and potential further gains over the next several weeks. MACD over the intermediate term for the Nasdaq 100 (QQQ) and the S&P 500 (SPY) have confirmed the strength of the overall market.   Continue to give the benefit of the doubt to the bulls.

I would love to hear from you.  Please call me at 516-829-6444 or email at bgortler@signalert.com to share your thoughts or ask me any questions you might have.

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*******Article published by Bonnie Gortler in Systems and Forecasts March 15, 2017

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Disclaimer: Although the information is made with a sincere effort for accuracy, it is not guaranteed that the information provided is a statement of fact. Nor can we guarantee the results of following any of the recommendations made herein. Readers are encouraged to meet with their own advisors to consider the suitability of investments for their own particular situations and for determination of their own risk levels. Past performance does not guarantee any future results.

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The first week of 2017 was strong after many major averages made new highs in December.  Since that time major averages have paused, digesting their gains.  The Dow Industrials has come close a few times to the key psychological 20,000 level, however so far unable to push through.   The Russell 2000 (IWM) peaked just above its upside objective at 138.00 and the S&P Mid-Cap 400 (MDY) also made its upside objective at 307.50, however then pulled back.  When the Dow closes above 20,000 there is a good chance other indices will also move higher, surpassing their old highs.

Our stock market timing models remain neutral-positive indicating a potentially profitable market climate.  The overall technical picture of the market remains positive.  The cumulative advance decline line of the NYSE advance/decline line confirmed the highs made in December.  When market breadth confirms price, usually that suggests the final high has not been made.  It was also a good sign that there were 490 daily new highs on the NYSE on December 8, the most since May 2013.  These types of readings are more bullish than bearish and suggest higher prices going forward.  It’s also bullish that the Nasdaq Composite is now leading in relative strength vs the S&P 500, a condition which has historically overall characterized more profitable market climates.

Watch The Direction of Technology:

PowerShares QQQ ETF (Nasdaq 100 Index) Weekly Price and Trend Channels (Top), and MACD 19-26-9 (Bottom)

The top part of the chart shows the weekly Power Shares 100 (QQQ), an exchange-traded fund based on the Nasdaq 100 Index and its trend channels.  The QQQ includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq stock market based on market capitalization. As of 01/10/17, Apple, (AAPL) is the largest holding comprising 10.87%, Microsoft Corp (MSFT) 8.53%, Amazon.com, Inc. (AMZN) 6.47%, Facebook, Inc. Class A (FB) 4.98%. Alphabet Inc. Class C (GOOG) 4.75% and Alphabet Inc. Class A (GOOGL) 4.19% totaling 39.79%.

All the top holdings have rebounded this year after being out of favor before the election. The QQQ rose 7 straight sessions, closing at a new all-time high.  With its recent strength, it looks like the QQQ could break out from here, (red circle above).

The upside channel objective is 130.00 (top blue channel line).

For now, the trend is our friend, however later this year could be more challenging as the market is in the late stages of a bull market.  As long as the QQQ is above the retracement line from the break out of 112.00 in July 2016 (pink line), now acting as support, periodic declines most likely will be buying opportunities. A break below 112.00 would be considered bearish and suggest a more serious market decline.

Keep an eye on Apple, (AAPL) the largest holding of QQQ which has a favorable monthly MACD pattern turning up from an oversold condition, after breaking its downtrend in September 2016 (chart not shown).  This has favorable implications for the technology area over the next several months.

The bottom half of the chart is MACD (12, 26, 9) a measure of momentum.  MACD has broken its down trendline which is favorable; however MACD is not in its most ideal buying position as the turn up didn’t occur from an oversold condition below 0.  This pattern needs to be monitored to see if MACD continues to rise further making a new high picking up momentum, as did the weekly MACD on the Russell 2000 (IWM) from October 2016 – December 2016.

Summing Up:

The overall trend of the market remains optimistic even though the Dow Industrials has been unable to get through the key psychological 20,000 level.  Maybe earning season that begins 01/13/17 will be the fuel that is needed to get through the level.  Upside channel objectives have already been met on the Russell 2000 Small Cap (IWM) and the SPDR S&P Mid Cap 400 (MDY).  So far the pullback has not jeopardized the bullish outlook.  In the meantime the Nasdaq 100 (QQQ) was up seven days in a row, reaching a new all-time high and has slightly penetrated its channel suggesting a possible breakout will occur.  Look for strength in the Nasdaq 100 (QQQ) to lead the overall market higher. As long as the QQQ remains above the retracement line from the break out in July 2016 (pink line) above 112.00, intermittent declines most likely will be buying opportunities.

I would love to hear from you. Please call me at 516-829-6444 or email at bgortler@signalert.com to share your thoughts or ask me any questions you might have.

If you like this article, then you will love this! 

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*******Article in Systems and Forecasts January 13, 2017


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Disclaimer: Although the information is made with a sincere effort for accuracy, it is not guaranteed that the information provided is a statement of fact. Nor can we guarantee the results of following any of the recommendations made herein. Readers are encouraged to meet with their own advisors to consider the suitability of investments for their own particular situations and for determination of their own risk levels. Past performance does not guarantee any future results.

 

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Shifting Your Money MindsetHow much of a difference would a shift in your thinking help in making 2017 your best financial year? Would you be willing to make the change? Especially if you knew it would give you some peace of mind when it comes to your money situation. Would you be willing to do what it takes to improve your circumstances? Hopefully, you’ve answered yes. Please understand that though there are many choices there is one thing that will reap you the largest return and that is to… INVEST IN YOU!!

You can start your journey toward change by learning to separate fact from fiction and by taking responsibility for your actions as you move away from getting caught up with decisions based solely on your emotions. You need to be clear headed if you plan to actually seize the opportunities that unfold and you cannot do so if you are always in reaction mode. You must be proactive in making solid decisions based on real data not on what you ‘wish’ or ‘hope’ for. When you focus on positive thoughts you can also create goals that will inspire you to save and invest. Learn to open your mind and educate yourself by reading, asking questions, and then reading some more. Do your best to immerse yourself in understanding the areas in your life that continue to elude your grasp. Your full attention is required if you expect to master your weak spots. This is especially true when it comes to finances since so many mistakes I see people make are due to their lack of knowledge. Don’t worry, I don’t expect you to take on everything at once. You can start by reading articles from magazines, trade journals and newspapers. These sources are generally well researched and prove most helpful when you arrive at those big decisions that will impact your future.

Becoming a mathematical genius, a stock market guru, or acquiring a degree in finance is NOT necessary to become prosperous. Opportunity exists at every turn if you are prepared to take advantage of it. The journey to wealth begins with a winning mindset and an understanding that every smart decision will bring you even closer to your goals, dreams, and aspirations. When done just right this will also include those financial decisions. But you have to take the first step in changing the way you look at money and how money works within your life. If you have a mental state and belief system that supports the idea “there is not enough” then you will fully live and experience a life of scarcity. Really it’s that simple. You have to shift your money mindset if you want things to be different.

I truly believe more than anything that you can do whatever your mind sets out to do. A life free from financial worry can be yours. You just need to take action so you can create the best life possible for yourself and your family. Your future is up to you! Decide what you want, never give up, and begin now to believe in YOU no matter the circumstances. I certainly do! If you have questions or concerns regarding shifting your money mindset or any area of your finances, feel free to contact me directly at Bonnie@BonnieGortler.com.

To your health, wealth and happiness,

Bonnie Gortler

The Inspired Wealth and Well-Being Coach

Visit here for your “Inspired Wealth and Well-Being Free 30 minute Discovery Session”

 

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Moneyjumpforjoybag

Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.”  

~Warren Buffet

Tracking your investments closely leads to more wealth in the short and long run.  If you are investing in the stock market, it’s a good idea to treat your investment portfolio the way you would if you were running your own business.  Wise investors and business owners track their #money closely.  It’s easy for you to begin tracking your investments.

Could you tell me right now how your investments are doing, or is that information left in the hands of someone else? No need to worry if you are not up to date with the exact figures because with today’s technology it’s simple for you to access your investments in real time.

Why do you want to track your investments closely?

You want to track your investments because the stock market is quite unpredictable. At times the market can move up and down, more or less than 5% in one day. No excuses, it’s a good idea to watch your portfolio.

Are you investing with the money you need to live on, or its money you have put away for your future?  Either way, you don’t want to be in the dark of about situation you may have been able to avoid.

Money bag PixabayAnswer These 9 Questions To Protect Your Money From Surprises

  1. What is your registration on the account? Is it a taxable account or non-taxable?
  2. Are your assets in a CD or money market that has a fixed rate of return?
  3. What is your risk on your investments; how much can you lose?
  4. Are your investments aligned with the current stage of life you are in?
  5. Do you have a company plan where all of your assets are in one single stock or are your assets at a brokerage house that invests for you?
  6. What is your portfolio invested in? (Example: Stocks, Mutual Funds, Bonds or Exchange Traded Funds (ETF’s)?
  7. Are you aware of the potential loss you can have if the stock market went down sharply?
  8. What fees are you paying on your investments?
  9. What percentage of equity and bonds are in your portfolio?

As a savvy investor it helps to take control of your investment by using an array of resource tools to help you track your investments. Protect your money so there are no surprises. In minutes you can visit a reputable website where you can follow what is happening, and prepare yourself at a moment’s notice if you decide an adjustment may be necessary. Accessing your investment portfolio on the web will allow you to read the latest news reports that affect the market or find key information that will disclose a buying or selling opportunity. You can view intra day price movements on stocks, exchange traded funds of all different sectors of the market and track mutual fund performance. You’ll discover by taking an interest in the resources that are available, you will become a more confident and informed investor. Both are keys in your financial success!

I would like to share with you a free and easy resource you can use when educating yourself. It also happens to be my favorite tracking site on the internet, check it out and go to Yahoo.com. Click on tab marked “Finance” to get started. Yahoo provides a wealth of timely information on what’s going on in the investment world in straightforward language meant to help any level of investor. Once there you will find that…

Yahoo Finance Can Help You:vision board wealth for life

  • See how your favorite stock market index is doing.
  • Watch your portfolio daily, check on the price movement of your individual stocks or mutual funds.
  • Export historical data of mutual funds, ETF’s, or stocks,
  • You can compare your investing holdings using their charting tools.
  • See and experiment with the technical indicators. They will give you clues to the trend of the market.

Protect yourself today by tracking your investments. By taking the time to do some research before you invest in the stock market you will avoid possible surprises that you are able to control. The market does not always go up (great fun) and there are some severe downturns (not fun) which can prove costly when you’re uninformed. Take care of your portfolio by tracking your investments closely by becoming a better informed investor. Always ask questions and you will find yourself learning more and more about investing. Whether you are a novice or professional, it’s a good idea to develop good money making habits.  Doing your research beforehand and watching the market closely will only deepen your commitment to continue tracking your investments. Over time you will find your careful attention will create the #wealth you deserve so you may live the lifestyle you desire.

If you like this article then you will love my free training  Stop Struggling Building Wealth  Get your Free Instant Download Register Here:

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Will you be in the same place as you are five years from now? Are you happy and enjoying your life? Focus on what you desire as if it is yours now. Visualize your success and have positive thoughts.

Experiencing challenges teaches you many invaluable lessons.   The number of times you succeed is in direct proportion to the number of times you fail and keep trying. Don’t give up.  Doubts and fears might pop up however they are temporary obstacles.

Be persistent. Focus on one step at a time to reach your goal. You will have a great feeling when you successfully meet the challenge. All great achievements require time, endurance, and a push to get through to move towards your goals.

Surround yourself with others who support you and are positive and avoid the people who give off negative energy or put you down. Openly share your talents with others.

You don’t need to know all your answers in advance.  Have a clear idea of the goal you desire to reach. Take one step at a time and be patient with yourself. Once you muster up the courage to begin, you’ll find the courage to succeed.  If you can believe it you can achieve it.

Share your own formula for creative success.

Bonnie Gortler

The Inspired Wealth & Well-Being Coach

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Do you believe that news reports are a dependable source for investment advice? There are many experts and websites over the internet with different information. At times it can be quite alarming.  Are you feeling confident that your stock market investments will hold up when the market feels as if you were on a roller coaster ride? Think about the review process that you currently have in place for your investment portfolio, if you are managing your own investments. It’s wise to have an investment strategy that is flexible and allows you the ability to exit quickly in order to reduce your exposure if the stock market is not performing well. You can reduce some of your uneasiness by seeking the advice of an investment professional that can answer your specific questions one-on-one when you are feeling unsure.

It’s wise to review your portfolio and lower your Risk by avoiding big losses. You want a portfolio to suit your needs within a certain time frame depending on your goals and objectives. If you are feeling stressed about your investments here are some ideas to follow that will help you in meeting your investment goals.

Simple Tips to Navigate During Stressful Stock Market Times

  • roller coaster stock-market-cartoons-5-300x2021Watch your investments to make sure they are doing what you expect.
  • No matter the strategy you choose, it’s a good idea to measure the returns and risks compared to a benchmark index for comparison.
  • You could be over weighted in a particular sector under pressure.  It’s a good idea not to have too many of your eggs in one basket.
  • Review your investment to see if any individual stock, exchange traded fund, or bond position exceeds 5% of your overall portfolio.
  • Prepare your plan with an exit strategy to allow you to bounce back before something unforeseen occurs.
  • When altering a security keep the whole portfolio in mind.
  • Individual stocks are volatile; you can make money fast or lose money quickly.
  • If you are investing in individual bonds review the credit rating to see they are good quality bonds.

It’s crucial that you set clear goals and objectives for your success.  Keep an eye on your portfolio so that you will know what is or isn’t performing well.  Be ready, flexible, willing, and prepared to make a change when and if you are feeling stressed by about your investments. Your future finances depend on it!

stock market roller coasterYou can feel good today about putting into motion a plan to build wealth without stress as you move even closer to a life of wealth and well-being.  You want to have a clear plan as you embrace change with new eyes and a renewed commitment toward your future.   Take time to do what is necessary in discovering ways to become more at ease with your finances.   Make the decision to live a healthy wealthy lifestyle filled with less frustration so you can enjoy the life you want.  As you continue your journey forward, remember to always place yourself in the best possible situation for success when creating a life full of wealth and well-being.

Let’s talk.  You are invited to set up your Free 30 minute Wealth and Well-Being Discovery session with me by calling 516-778-8714 or by clicking here or send me an email at Bonnie@BonnieGortler.com. I would love to connect with you.

Wishing you health, wealth & happiness,

~Bonnie

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For almost 2 months, the market was quiet, moving sideways to higher. The S&P 500 (SPY) daily change was less than 1%, and then September 9th occurred.  Investors’ perception changed from bullish to bearish, spooked by news of potential rising rates in September, sooner than expected and the S&P 500 fell 2.45%.   It’s been months since heavy selling has occurred. Volatility rose sharply. VIX, (an index that measures fear) increased from an intraday low of 11.65 to a high of 20.51 in two days, a gain of 76%.  There was no place to hide.

The next day, stocks reversed quickly to the upside, however the rally couldn’t be sustained.  Heavier selling the next day was broad based.   Few stocks rose and many fell. The tape showed very poor market breadth readings on heavy volume, including new 52 week highs deteriorating. The trading screen was full of red, emotions rekindled, and a feeling of angst by investors was front and center (including me).   Volatility is back.   Risk has increased.   Market breadth is no longer favorable supporting the market, so stock and sector selection will be more important making money going forward.   Our models have moved from positive to neutral and no longer suggest the market is low risk.

For the short term in favor of the bulls, the major averages are only a few percent from their highs. Support levels on the S&P 500, Nasdaq and Russell 2000 have held so far.  The unfavorable seasonal period of September, including expiration will soon be behind us.  Institutions will begin to focus on the end of quarter window dressing, preparing for rising rates and the presidential elections. Also supporting the market is Apple, (AAPL) the stock investors had shied away from, out of favor since the highs made in April 2015. Apple (AAPL) has clearly broken its weekly downtrend to the upside, now up from 102.53 on 091216 to trading at 114.91 as of this writing.  If Apple rises more you can look for the technology sector to continue to be stronger than the S&P 500.   In the long run this is a bullish sign for the market.

As of this writing the latest decline looks more like a short-term pullback within an uptrend that could lead to more gains and another test of the highs.   I am cautiously bullish watching closely to see if the support levels hold, and if the intermediate up trend remains in-tact I will give the market the benefit of the doubt.

Chart To Watch Now:

The SPDR S&P 500 (SPY) Weekly With Channel (Top) and 12-26-9 Week MACD (Bottom)

spy091516

The chart above is the weekly SPDR S&P 500 (SPY) ETF that is comprised of 500 stocks of the largest companies in the U.S.  As of 09/14/16 its top 4 holdings in the S&P 500 were Apple Inc. (AAPL) 3.07%, Microsoft Corporation (MSFT) 2.39%, Exxon Mobil Corporation (XOM), 1.93% and Johnson & Johnson (JNJ) 1.74%. Investing in the S&P 500 (SPY) gives you a broad representation of the overall large-cap U.S. stock market.

The top part of the chart shows the S&P 500 (SPY) penetrated its trading channel, getting through resistance at 212-214.00 in July 2016 (red circle).  Notice on the recent sell off, the S&P 500 tested the breakout of the channel making a low of 212.50, holding just above 212.00 acting as key support.   As long as the S&P 500 (SPY) can hold 212.00 and turns up, this would be considered a successful test of the upside breakout in July.  The upside target for the S&P 500 (SPY) remains at 228.00 mentioned in the August 18th newsletter.

On the other hand, if the SPY closes below 212.00 for two days, a warning would be given a further decline is likely.   As long as 204.00 on the S&P 500 (SPY) is not violated, the intermediate trend remains intact (the green line) and up.  If violated, the decline could accelerate fast and possibly be more than a short term correction.   Next support 197.00.

The bottom half of the chart shows MACD, a measure of momentum. MACD is now falling, and has generated a sell. It’s very clear momentum is weakening.   It’s a good sign MACD confirmed the breakout and no negative divergence took place.   Tops many times take a long time to form and the confirmation makes me believe another leg up could occur before there is a more serious decline.   Its positive MACD confirmed the breakout and no negative divergence took place.

Summing Up  

There was a short term change in investors’ perception from bullish to bearish that evoked panic selling and caused stock prices to fall sharply with increased volatility.  It looks like there has been a successful test of the upside breakout in July.  Warning signals are starting to form in intermediate momentum indicators that a potential top is looming and upside potential could be limited.  Stock and sector selection will be more important as the year moves forward.  The upside target for the S&P 500 (SPY) remains at 228.00.  For now the intermediate trend remain up.  Quiet times are over, expect volatility, and more risk. Review your investments now before the bears take charge and the intermediate trend changes from bullish to bearish.  The key number to watch on the S&P 500 (SPY) is 212.00.   A close below 212.00 for two days would be a warning further decline is likely.

I would love to hear from you. Please call me at 516-829-6444 or email at bgortler@signalert.com sharing your thoughts, or ask me any questions you might have.

If you like this article, then you will love this! 

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*******Article in Systems and Forecasts Sept 15, 2016

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Disclaimer: This is a hypothetical result and is not meant to represent the actual performance of any particular investment. Future results cannot be guaranteed. Although the information is made with a sincere effort for accuracy, it is not guaranteed either in any form that the above information is a statement of fact, of opinion, or the result of following any of the recommendations made herein. Readers are encouraged to meet with their own advisers to consider the suitability of investments discussed above for their own particular situations and for determination of their own risk levels.

 

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I like to have a good clear out and get rid of clutter on a regular basis; now, if truth be told some people will never have to do this because they never accumulate enough clutter in the first place. They move through life smoothly and efficiently, shedding the unnecessary as they go. But for me and a lot of women I know, there’s some clutter still left to clear.clear-clutter-vivenne

Recently I had the bitter sweet experience of clearing out all the rest of my husband’s personal effects at the end of our nine year relationship. It was sad and I cried but I also felt lighter and freer to reclaim my space and my life again – not to mention the luxury of having a whole load of new cupboards and drawers available for storage! As the Single Mum’s Survival Guide (and a single mum myself) I know that many of you may have the physical effects of your old relationship – photos, valentines cards, mementoes of your time together.  Don’t be too hasty to purge here if you have children together because there might be things like photos that your child may really appreciate having in the future- after all, this is documentation of family history. Perhaps they could live in the attic -out of sight- until your child might want to look through them, by which time they might not seem so painful to you to behold. Then there’ll be the mental and emotional clutter – the pain, the hurt, the anger and the regrets. Isn’t it time you had a clear out, to make room for a happy new life?

It may be that your clutter is not emotional in that sense. It could be papers as yet unfiled, magazines as yet unread or bills as yet unpaid. Chances are, though, that every time you look at your clutter, procrastinate about tidying it up or attempt to find something in the piles (or even try to ignore it altogether), it will be adding guilt and draining energy and productivity from your day.

Sometimes we need help clearing out our clutter and that means hiring a coach or other professional to help us to get started and ensure that it is a positive and useful experience. I’d like you to have the opportunity to clear out your clutter now. Haven’t you waited long enough?

Vivienne Smith, Coach and author of The Single Mum’s Survival Guide

 

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Day-to-day volatility is extremely low, as the summer winds down and the election looms.  Over the past 25 days the daily price movement range is slightly lower than two weeks ago, 0.26% – 0.31% for the S&P 500, Russell 2000, and the Nasdaq 100.  Investors will keep in the back of their minds (including myself), the potential rate hike in order to decide how much risk they want to bear.   The rise could come in September even though it’s unlikely.  December is more of a possibility, or even early in 2017.  

The major averages are trading near their highs.  There has been profit taking in Utilities and Real Estate after their strong performances this year.  During the month of August, Emerging Markets, Financials, Nasdaq, Midcap and Small Cap areas were all more profitable than the S&P 500.  I am expecting downside risk to be contained in the months ahead, as long as no unexpected news of a sharp rise in interest rates.   If a change in investor’s perception from bullish to bearish does take place, volatility will increase quickly and prices will fall quickly.

Over the next several weeks I recommend you to watch the small cap sector very closely for a potential change in the intermediate trend that has been clearly up.  If the IWM lags the S&P 500 a warning sign will be given of a potential change in the intermediate trend.

What Charts You Want To Watch Now:

iShares Russell 2000 ETF (IWM) Weekly Price (Top), and 12-26 Week MACD (Bottom)

083116 IWM WEEKLY

The top portion of the chart shows the weekly iShares Russell 2000 ETF (IWM) which is made up of companies with a market capitalization of between $300 million and $2 billion.   The Russell 2000 (IWM) peaked on 06/22/15 at 129.10.  After finding a bottom, the Russell 2000 (IWM) rose sharply breaking the downtrend on 04/18/16 (blue line). The IWM rallied, and then paused for a few weeks retracing some of its gains, testing the downtrend line.  The IWM then broke through resistance at 117.00, the mid channel.  The upper channel objective is 138.00.   If the IWM instead stalls from here, 117.00, the old resistance will act as support.

As long as the IWM is above 117.00 I would expect higher prices.  If the IWM falls, and breaks below 117 for two days on a closing basis, this would not be a good sign and the intermediate trend would be in jeopardy.

The lower portion of the chart is MACD, (a momentum indicator).   MACD generated a great entry from an oversold condition, rose sharply breaking the short term trend line (pink line), and has never looked back.  More good news is the long term down trend since December 2013 (green line) has turned favorable, which supports the bullish case and will support the market.  Favorable seasonality is also only a few months away for small caps.  Investors might be ready to shift their assets and take on more risk by reducing their holdings in large cap and dividend paying stocks that are somewhat extended and overvalued.

Even if the IWM turned down now, I would not expect it to be long lived and become a major decline after the strength of the momentum and the longer term breakout that has occurred.  If there is a 2-3% pullback this would be an ideal area to buy.

Weekly (IWM) Russell 2000 Index / (SPY) S&P 500) Ratio (Top); MACD of IWM/SPY Ratio (Bottom)

0830IWMSPY RATIO

The top part of the chart on the right is the Weekly Russell 2000 /S&P 500 (IWM/SPY ratio).   A rising line means the IWM is stronger, and if falling, the S&P 500 is stronger.   The IWM is clearly leading in relative strength confirming the rise in the IWM.  The downtrend has been broken from June 2015 and could very well break the longer term trend from February 2014 if the small caps continue to be stronger than the S&P 500.  A turn down and break of the uptrend would not be a good sign.

The lower portion of the chart is MACD of the IWM/SPY ratio, still rising, no weakening momentum of at this time.  The IWM/SPY ratio is almost at new highs and there are no negative divergences, bullish.

Summing Up:  

Day-to-day volatility was extremely low in August but this could change fast. The intermediate trend remains up supporting the market and the bulls remain in control for now.   Our models remain favorable.  I believe the advance will continue however I am recommending watching the Russell 2000 (IWM) for direction to see if the IWM rises further to the top of the channel at 136.00. If the IWM falls instead and breaks below support at 117.00 for two days on a closing basis the retracement could be the warning that the intermediate rising trend is over and a decline is ahead. It’s a good time to review your investment portfolio and have your exit strategy ready in case the unexpected occurs, and the bears come out of hiding.

I would love to hear from you. Please call me at 516-829-6444 or email at bgortler@signalert.com sharing your thoughts, or ask me any questions you might have.

If you like this article, then you will love this!  Click here for a free report: Top 10 investing tips to more wealth.

*******Article in Systems and Forecasts Sept 01, 2016

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Disclaimer: This is a hypothetical result and is not meant to represent the actual performance of any particular investment. Future results cannot be guaranteed. Although the information is made with a sincere effort for accuracy, it is not guaranteed either in any form that the above information is a statement of fact, of opinion, or the result of following any of the recommendations made herein. Readers are encouraged to meet with their own advisers to consider the suitability of investments discussed above for their own particular situations and for determination of their own risk levels.

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The stock market has quietly advanced during the first half of August. The daily price movements over the past 25 days in the S&P 500, Russell 2000, and the Nasdaq 100 have been extremely small, ranging from 0.28% – 0.43% as prices have moved higher. As long as this phenomenon continues of low day to day volatility, downside risk will be contained.

Tape action remains encouraging, many major indices have broken through resistance levels that were in place for over a year and have made new all-time highs. Market breadth has supported the advance with The New York Stock Exchange (NYSE) advance-decline line also making a new high. A market top rarely happens at a final price high that is confirmed by the (NYSE) Advance-Decline Line.
The August through October period historically is not an ideal low risk environment to be invested in the stock market. During the third quarter of an election year, like now, the negative bias is not true.
Instead, it’s positive for the market.

Our models continue to suggest favorable market conditions, although not at the level where risk is
at its lowest. There are no blatant warning signs of a potential serious decline ahead; however there are a few small non-confirmations. I would like to see the transportation average confirm the Dow’s recent high and for the Russell 2000 Small-Cap Index to outperform the S&P 500 (SPY) and make a new all-time high.

All in all, the tape remains favorable, the bulls remain in control and I believe the advance will continue.

What Are The Charts Saying?

The SPDR S&P 500 (SPY) Weekly With Channel (Top) and 12-26-9 Week MACD (Bottom)

081716 SPY WEEKLY

The chart above is the weekly SPDR S&P 500 (SPY) ETF that is comprised of 500 stocks of the largest companies in the U.S. As of 08/16/16 its top 4 holdings in the S&P 500 were Apple Inc. (AAPL) 3.12%, Microsoft Corporation (MSFT) 2.40%, Exxon Mobil Corporation (XOM), 1.92% and Johnson & Johnson (JNJ) 1.79%. Investing in the S&P 500 (SPY) gives you a broad representation of the overall large-cap U.S. stock market.

The S&P 500 (SPY) finally broke out of its trading channel beginning December 2014 after penetrating the 212-214.00 resistance on 07/11/16. Old resistance is now key support if a pullback would arise. It would be bullish if the S&P 500 (SPY) remains above this level, increasing the odds of the SPY reaching the upside target of 228.00, 5% higher. Another point of reference to watch is if the uptrend remains intact from the February lows. The green trendline in the chart shows that this uptrend remains intact. As long as 204.00 is not violated, the intermediate trend is up. Remember the trend is your friend.

On the other hand, if SPY breaks below 212.00 this would be an early warning that the intermediate trend is in process of changing, and risk increasing. If the uptrend is broken, the middle channel at 197.00 would act as the next support level.

The bottom half of the chart shows MACD, a measure of momentum. MACD is on a buy, rising, above 0, and has confirmed the price high made in the S&P 500 (SPY). MACD needs to be monitored to see if and when it turns down.

This would be an advanced warning that momentum is weakening and that a potential change of trend could occur.

MACD is now somewhat extended, but no negative divergences exist and the uptrend remains in effect.

Therefore, no need to worry yet, continue to enjoy the ride.

Summing Up:

The stock market advance quietly continues. Our models remain favorable. Market breadth and price action is positive. The advance decline line has confirmed new highs in the S&P 500 (SPY) suggesting a final top most likely hasn’t been made.

Major market averages have broken through resistance to the upside after many attempts earlier in the year.

The uptrend from the February lows remains in-tact. The trend is our friend.

In the near term, unless the S&P 500 (SPY) closes below 212.00 for two days, the benefit of the doubt goes to the bulls for the S&P 500 (SPY) to continue higher toward the upside objective of 228.00.

I would love to hear from you. Please feel free to share your thoughts, comments or ask any question you might have. Call me at 1-516-829-6444 or send an email to bgortler@signalert.com.

If you like this article, then you will love this!  Click here for a free report: Top 10 investing tips to more wealth.

 

*******Article in Systems and Forecasts August 18, 2016

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Discover the right wealth building attitude

Download a
Free chapter
of my book
Journey To Wealth

 

 

Disclaimer: This is a hypothetical result and is not meant to represent the actual performance of any particular investment. Future results cannot be guaranteed. Although the information is made with a sincere effort for accuracy, it is not guaranteed either in any form that the above information is a statement of fact, of opinion, or the result of following any of the recommendations made herein. Readers are encouraged to meet with their own advisors to consider the suitability of investments discussed above for their own particular situations and for determination of their own risk levels.

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