Wednesday Weekly Wealth Watch – Vance Howard

March 26, 2014

Wealth Watch Weekly E-Newsletter The Dow and S&P 500 have been just chopping around, going neither up nor down. However, the NASDAQ has dropped precipitously with Biotech and the Healthcare sectors dropping pretty hard over the last two weeks. Biotech and Healthcare have been leading sectors for some time now and we have profited nicely from both. A lot of leading stocks have dropped much more than the indexes, which is not uncommon after they have been leading it. There is big money to be made from the leading stocks, but with larger profits come larger drawdowns and additional volatility. From the chart below, you can see that a flag pattern looks to be setting up, but I’m not sure whether it will ultimately go up or down. Yes, the markets are boring and sloppy so far this year, but we are only in the third round of a twelve round fight. We intend to be the championship fighter, fighting all the way to the final bell of the last round, so there is lot of time left to make money this year.

Wednesday Weekly Wealth Watch – Vance Howard

As I wrote last week, along with the flag pattern I mentioned above, the S&P 500 is still setting up the right hand side of a cup and handle. The longer the handle extends without breaking out, the stronger the move will be if it breaks to the upside. Until the market changes trend and the HCM-BuyLine® goes negative, all pullbacks should be viewed as buying opportunities with stocks on sale. Just for clarification, the BuyLine is a long way from going negative.The bond market is hitting an area of strong resistance. With the Fed clearly tapering, there is only one way for rates to go, up, and that is bad for bond prices. When the market comes out of hibernation and starts to move higher, as we believe it will sometime this year, bond prices will drop. There is money to be made in the bond market if you are nimble and have a good trading system for trading the bonds. All our bond portfolios are up this year and all are beating the S&P 500 index.

The HCM Optimized Trend Indicator (OTI) stock of the week is Facebook (FB). As you can see from the chart, FB didn’t do terribly well directly following its IPO, and the OTI didn’t put out too many signals on it. However, back in July 2013 when FB was trading around the low $30s, the OTI put out a buy signal. Looking at the price today, FB is trading around the low $60s. In my opinion, it looks like the OTI made a pretty good call on this one.

Talk to you soon!
Vance

(770) 642-4902

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Please Remember: Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a subscriber or prospective subscriber’s investment portfolio. Therefore, no current or prospective subscriber should assume that investment in his company stock is appropriate for his/her financial situation or investment objective, or that the future performance of his/her company stock will be profitable or equal any specific performance level(s).

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