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Can This Finally Trend?

CAMS Weekly View from the Corner – Week ending 9/13/2019

September 16, 2019

The stock market is certainly higher now than it was two years previous but it has been anything but trending.  Rather, it has been a series of fits and starts whereby at any given time along the two year timeline we would see it was struggling or thriving.

All told the two year experience has been a very large range with three previous attempts to break higher out of its range and actually trend.

In the last several weeks the stock market has been chopping around a bit but holding tight at higher levels.  This now takes us up to current day whereby, yet again, the stock market is working on putting in a trend.

Click For Larger View:

The above chart surely wins the award of the most used chart in the history of these Views as we have shared it several times while monitoring this on-going trendless stock market backdrop.

The red lines denote the volatile and trendless experience the stock market has displayed in the previous two years.  The solid black line identifies the high level mark of the initial up trend back in late 2017 and acts as the “break out” point whereby a continuation of trend would be in place if the black line could be exceeded.

We’ve seen said black line exceeded on various occasions only to then see it turn south quickly – not a trend.

Finally, the blue line has been a recent edition that we shared offering that it was imperative to see the stock market hold that level lest it revisit the low points of late May.

Currently, we are on our 4th time now of attempting to stay above the black line and to actually trend.  For a trend to occur we need to see it exceed the previous high point and certainly no longer be revisiting the black line.

For our part some mellowing here at these high levels would not be a surprise.

We continue to watch this closely as we simultaneously continue to see no evidence of imminent recession.  With this, a breakout trend may be the 4th Quarter surprise as many are convinced recession is imminent and negative stock market behavior will follow.

I wish you well…

Ken Reinhart

Director, Market Research & Portfolio Analysis

Portfolio Manager, CAMS Spectrum Portfolio


H&UP’s is a quick summation of a rating system for SPX9 (abbreviation encompassing 9 Sectors of the S&P 500 with 107 sub-groups within those 9 sectors) that quickly references the percentage that is deemed healthy and higher (H&UP).  This comes from the proprietary “V-NN” ranking system that is composed of 4 ratings which are “V-H-N-or NN”.  A “V” or an “H” is a positive or constructive rank for said sector or sub-group within the sectors.

This commentary is presented only to provide perspectives on investment strategies and opportunities. The material contains opinions of the author, which are subject to markets change without notice. Statements concerning financial market trends are based on current market conditions which fluctuate. References to specific securities and issuers are for descriptive purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities. There is no guarantee that any investment strategy will work under all market conditions. Each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market. PERFORMANCE IS NOT GUARANTEED AND LOSSES CAN OCCUR WITH ANY INVESTMENT STRATEGY.

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