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. 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

Would you like advice on how to invest your company-sponsored retirement plan? Ask your advisor how the HCM 401(k) Optimizer® can help. This subscription service is now offered with a free basic subscription to LifeLock! All programs offered by Howard CM are developed and run using Spartacus. It is a disciplined, systematic approach that removes guesswork from our trading. The power and strength of Spartacus are derived from three major components: the process is mechanical, non-emotional, and repeatable. Howard Capital Management’s investment strategies are designed to protect capital in market downturns and to outperform the major indexes during market upswings. To help accomplish this goal, we developed the HCM-BuyLine®, a proprietary indicator used to identify the trend of the market.

The HCM-BuyLine® signals when and how much to invest in equities. Although its design is technical, its interpretation is straightforward. It produces a measurement of the number of buyers and sellers, and gives us a non-emotional indicator of the intermediate-term trend of the market

This newsletter is a publication of Howard Capital Management, Inc. It should not be regarded as a complete analysis of the subjects discussed nor should the newsletter be construed as personalized investment advice. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. It should not be viewed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.

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Please Note: The HCM Optimized Trend Indicator (“OTI”) is a tool developed by Howard Capital Management, Inc. (“Howard”) to help assist a subscriber to determine what portion, if any, of the subscriber’s company stock should be bought, sold or held in the subscriber’s retirement portfolio as of a particular date. Subscriber maintains absolute discretion as to whether or not to follow the OTI. It remains the subscriber’s exclusive responsibility to review and evaluate the OTI and his/her company stock and to determine whether to accept or reject any recommendation and to correspondingly determine whether any OTI recommendation is appropriate for his/her financial situation, or investment objective (for which Howard has and expresses no knowledge or opinion).

Howard does not offer or provide investment implementation services, nor does it offer or provide initial or ongoing individual personalized OTI advice (neither in person nor via the Internet) to Optimizer subscribers.. Howard will nothave and will not accept any trading authority for the subscriber’s retirement account. Thus, it shall always remain the subscriber’s exclusive responsibility to review and evaluate the OTI and to determine whether to accept or reject any OTI recommendation, and if accepted, to then subsequently implement such recommendation on his/her own without assistance from Howard.

The subscriber acknowledges and understands that the OTI is an opinion only, based upon Howard’s judgment as of a particular date. The OTI opinion could be wrong. No current or prospective subscriber should assume that investment in, or purchase and sale of, his/her company stock based upon the OTI will be profitable for his/her retirement portfolio. Unlike the mutual funds that are available for investment in the subscriber’s retirement portfolio, individual equities such as the subscriber’s company stock are not diversified positions, and may be subject to greater volatility and principal risk. Subscribers should be guided accordingly.

Subscribers do not receive investment supervisory or investment management services from Howard. The OTI is not tailored to any particular subscriber’s individual’s risk parameters, financial situation, or investment objective(s). It is the subscriber’s exclusive responsibility to determine what portion of company stock, if any, is suitable for his/her financial situation and/or investment objectives, both initially and on an ongoing basis. No subscriber should assume that his/her subscription serves as a substitute for individual personalized investment supervisory and/or management services from an investment professional of the subscriber’s choosing regarding the ownership of the subscriber’s company stock in the subscriber’s retirement portfolio.

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).

RELEASE: Each subscriber or prospective subscriber acknowledges and accepts the limitations of the OTI and agrees, as a condition precedent to his/her access to the OTI, to release and hold harmless Howard, its members, officers, directors, owners, employees, affiliates, and agents from any and all adverse consequences resulting from his/her/its use of OTI, including, but not limited to, investment losses resulting from the subscriber’s implementation of any of OTI recommendations.

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