Money is a tool. It's something that supports your life!

We touch on Yields in the market, sharing the Equity and Fixed Income Strategy from the Portfolio Advisory Team, as well, we have a new team member to introduce!

We’re neither bullish nor bearish. We are indifferent to which way the market is headed. If it is rising, we’re long equities. When it reverses that trend, we will be underweight equities and long bonds and cash. 
 

 

Meet Our Newest Team Member!

We are excited to introduce Maui, the newest and cutest member our team! He is very friendly and outgoing, but his work ethic leaves something to be desired as he has a tendency to nap through the day...

Interesting Charts

1) "Market Bubbles" are described as an economic cycle that is characterized by the rapid escalation of market value, particularly in the price of assets. During a bubble, assets typically trade at a price, or within a price range, that great exceeds the asset's intrinsic value. - Investopedia 

 

Below's tweet, though a little blurred, shows a bubble has not occurred as prices are rising steady.

 

2) The recent rise in long-term rates indicates investors are feeling optimistic that life will return to some sort of "normal" in the next few years.



3)  There's a time and a place for stocks, and there is a time and place for bonds. 


Image Source: Optuma.com


4) Average household savings has increased dramatically since the pandemic began. How are you planning to put your savings to work?
 

 

Technical Comments

The monthly S&P500 chart traded above the January high, but finished the month in the middle of its range. That is neutral, like January’s small body, and it lowers the probability of a big move up or down in March.
 
The monthly chart has had 3 thrusts up from the pandemic low. If there is a reversal down within the next couple of months, traders would see the yearlong rally as a parabolic wedge top. On the monthly chart, the wedge only has 6 bars. If March reverses down, the top will be minor. Therefore, once there is a reversal down, it should only last for a couple bars (months), like most reversals since 2016 (in 2018, one reversal lasted for 3 months).
 

Where is support?

When a bull channel is tight like this, traders typically are eager to buy the 1st selloff. There will be bulls looking to buy a 10% and a 20% selloff. Traders pay attention to these numbers. When a market sells off 10%, the selloff is a correction, and not a pullback. Once it falls 20%, it is a bear market. The bulls buy these key levels as support, betting that once the name of the selloff changes, there will be other buyers betting on a resumption of the bull trend.
 

What about the bull case?

There has only been a single pullback to below a prior month’s low in a year, and that pullback was only a single bar. The bulls have been very aggressive.
Can the rally continue up to above 4,000 without March going below the February low? If a trader just looks at the monthly chart, February was neutral. Therefore, one could conclude that there is a 50% chance that March will go above the February high and test 4,000, and a 50% chance it will fall below the February low.
But with January and February having small bodies and largely overlapping one another, there is a reduced chance of a big move up or down from here within the next few months. That means it probably will not go more than a bar or two either way before it reverses again.

 

The Portfolios

Feb was a busy month in our portfolios. We took profits where available and we also sold Regi, Nio, all of the ARK Etfs, Docusign, XMA, Tan, and Snap.
 
We added Cleveland Cliffs, Smartcenters Reit, and Shopify.
 
Snapshot of some of the new names
 
Cleveland Cliffs Inc is a vertically integrated producer of iron ore and steel products. It has upstream and downstream operations. It supplies customized iron ore pellets and steel solutions.
 
ShopifyInc  provides a cloud-based, multi-channel commerce platform designed for small and medium-sized businesses. If offers subscription solutions and merchant solutions.
 
Smart Centers Reit develops, leases, constructs, owns and manages shopping centers, office buildings, high-rise and low-rise condominium and rental residences.

Returns on our 60/40, 70/30, and 80/20 portfolios before fees: As of March 9, 2021

 

And Something Interesting...