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The bears started the week off with a tear down, but the bulls got their appetite back towards the end of the week and were able to stop the bears. When the dust settled on Friday’s close, the S&P 500 finished the week down .01%. The S&P 500 is still well within the trading range established back in January. It’s a matter of time before the S&P 500 breaks up or down out of the trading range. The longer it remains inside of the range, the closer the odds of a break up or down. Right now, the bulls have a slight advantage as the trend up prior to the trading range was so strong.
Bull / Bear Market
We are on the last trading day of the month. Both the S&P 500 and All World (ex-USA) indices are outpacing treasuries. Barring an abnormal even, both will finish April ahead. The S&P 500 is just edging out the All World index. This leaves us in a risk on stance according to momentum.
The swing indexes we like are the following: United Kingdom / Japan / Oil / Extended Treasury / Australia / Brazil / International Government Inflation-Protection Bonds / EAFE Value / Global Natural Resources
Most of the indexes were flat akin with the S&P 500 as none of them finished a great degree higher or lower. We did get stopped out of the International Government Inflation-Protection Bonds. This is an index we will continue to watch and look for future purchase prices. Many of the international markets are behaving similar in nature to the S&P 500 as they are ‘stuck’ in a trading range.
We adjusted the stops up with regards to the United Kingdom and Brazil. If the markets do continue to deteriorate, we will surely get stopped out of the tighter stops in hopes that more can be purchased at a lower price in the future.
The S&P 500 made a new high at the beginning of the 2018 giving us the top of the current larger trading range. We continue to adjust our stops up as the markets allow for adjustments. A new one we like breaking out of a large multi-year trading range is Global Wind Energy. We will surely start in this if we see some positive action this week.
The FOMC is meeting this week and the announcements are on Wednesday. The employment numbers are scheduled for release on Friday. Of course, either one of these could be sighted as market moving events.
The Education/Gratitude Book Club
This month’s book is “The War of Art: Break Through the Blocks and Win Your Inner Creative Battles” by Steven Pressfield. We’ll have another for next month. I’m thinking about an economic behavioral book, but I’d like to find a good one that isn’t too dry. OK, have a great week!