I haven’t found a whole heck of a lot to write about over the past few weeks, mostly because the language from my last several posts still applies – and partly because I spent spring break in Florida with my family!
Looking back to my post from January 18th, I suggested that we were in uncharted territory and that markets were more overbought than they had ever been. 6 trading days later, the correction started.
In the post on February 8th, I asked if volatility had returned for good. Since then, we’ve come down from the extremes but the VIX (the market measure of volatility or fear) has remained elevated and today sits at 15.45, still about 5 points below its long-term average closer to 20.
On March 23rd my post discussed additional downside risk, and consolidation around the 200-day averages. We got that downside almost immediately and I followed up with another post on March 26th again suggesting that consolidation around the 200-day averages should take some time if we are to have any confidence in a move higher.
Again on April 10th, we made similar remarks.
So, not to beat a dead horse but – we are right where we left off with the major indexes holding the 200-day averages. Earnings season has been strong but guidance for future quarters has not been “irrationally exuberant” enough to kick-start the rally back into high gear. So, the market continues to look for a catalyst.
For now, we are stuck in a sort of range-bound and directionless market – which can wreak havoc on performance for traders. Long-term investors are much better off riding out these short-term swings and sticking to their long-term investment plan.
We remain bullish with a healthy dose of caution.
Below is a picture from the family vacation – taken in Gramcrackers’ front yard!
Shane Fleury, CIO
Elevate Capital Advisors
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