OTM Market Update – More of the Same

Prior Week Market Performance:

  • The S&P large caps gained 0.6% last week to 2110.30.
  • The Russell 2000 small caps gained 0.6% last week to 1230.04.
  • Long Bonds (TLT) lost 1.3% last week to 126.54.
  • Asset Allocation Model: Stocks (52.5%); Bonds (27.5%); Discretionary (20%)

 Last Week’s Commentary:  The technical models have clearly been saying that the market is fine.  I have been paying attention to the classic patterns such as triangles and wedges, but should have been paying more attention to the models that I’ve spent so much time building.  In looking for an edge, I end up cutting myself with that knife.  At this point a market analysis is simple:  the market looks healthy.  Leading indicators are still looking good.  Asset allocation is 45/36 stocks to bonds and the remaining 18% is your call.

Current Technical Model Indicators (Short, Med, Long periods):

  • Large Cap S&P 500 – BUY, BUY, BUY
  • Mid  Caps – BUY, BUY, BUY
  • Small Caps – BUY, BUY, BUY
  • Micro Caps – BUY, BUY, BUY
  • Long Bonds – SELL, BUY, BUY

 This Week’s Commentary:  The overall market is as expected.  Stocks continue to creep up and are in the middle of a broadening pattern with good technicals.  Long bonds are in a short term correction.  Note that they are correcting at about 2x the rate of the large cap market increase, so if you are properly diversified long term at 2x stocks to bonds you are unchanged on balance.

Changes are equal that the broad market will go up or go down this week.  It is in the middle of a channel.  But any change should be relatively mild, and the longer term signs are all positive.

02222015 GSPC

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