Astute Strategist Blog


Market Context

Good Sunday Night / Monday Morning,

Over the past month, we have seen the S&P 500 oscillate 100 points between 2940 and 2840. As soon as the Fed said too much that was hawkish, President Trump to the rescue with a tweet or his staff with mentions of China trade talks going very well and zoom we go back to above 2900, add the short covering of traders with the market at 2900 and of course higher we would go. After having closed a day just shy of 2940 we finally broke through to the upside with and the S&P 500 closed the week at 2978.

A week into September and investors and traders are sitting eyes wide as this month is typically quite volatile in nature and an option traders delight. The key concern will be to see if the bulls can keep their strength up and get a closing in the S&P 500 above 3000. Will we get there? Truth be told, as far as the trade war concerns go, there is little that can disrupt the market.

Put very simply, there is no better alternative to put money. Between 1-2% interest and negative rates in other parts of the world, logic dictates the capital flows will have the buying of US equities along with US dollars. As it stands, our opinion on this market is very bullish over the long term and it is also our opinion that we are likely to see volatility begin to really spike as we get into 2020. Typically, election years have not been calm and quiet for the markets. Our core portfolio remains long equities with adequate hedging using the indexes as well as individual stocks to accumulate and more shares as we continue to dollar cost average and increase our dividends. Markets worth buying do not go straight parabolic, there are often peaks and dips, that said we are definitely buyers of fear and sellers of greed. It’s all about protecting your capital.