Market Notes

Eagle, Colorado

Time flies… hard to believe it is March 2019 already.

I intend to keep this short given the length of my last post (which if you missed I encourage you to check out).

In February, markets continued to power higher with the S&P 500 Index (SPX) up 2.97% bringing the year-to-date return to 11.08% through the end of the month. At this rate – the market should be up 66.48% this year, right? I think this is an unlikely outcome but it sure is fun to extrapolate.

In the first few days of March, the markets have cooled a bit – perhaps it is finally time for that breather before powering even higher.

This is how my 1-year SPX chart looks today:

SPX 1-year chart with 1-day candles. Click the image to enlarge it so you can see the numbers.

The Red lines are areas of support – and the green lines are/were areas of resistance. When we break through support or resistance, the tendency is for the price to keep moving toward the next line of support/resistance. This is on overly simple way to look at it – but it works.

The areas on the lower charts which I have circled in red, show that momentum has turned to the downside and buyers recently became exhausted.

The SPX has so far failed to reach its previous highs and with all these things in alignment the odds for at least a short-term pullback are high.

We continue to hold substantial cash and we will take advantage of that should the SPX drop from here but hold above the recent low of 2346.58. If the 200-day moving average holds as support (at around 2750) that would also be very encouraging. Otherwise, across all portfolios we will continue to be patient and allocate based on our time-tested rules-based strategy.

Our most recent new position (in the Income Portfolio) is Altria. You can check out the position one-pager here. And don’t forget the one-pager for all your investments is posted here.

We have our eye on several other great companies, but we must wait for the all-clear signals before having the confidence to put your hard-earned money at risk. There are several risks of which to be mindful – too many to list here – but there are (always) reasons to be optimistic too.

Look for my next post on 3/20. Thank you for reading!


Shane Fleury

Chief Investment Officer


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