Written by Lance Roberts, Clarity Financial
Data Analysis Of The Market and Sectors For Traders
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S&P 500 Tear Sheet
Performance Analysis
Technical Composite
ETF Model Relative Performance Analysis
Sector & Market Analysis:
See main body of report.
Sector / Market Recommendations
The table below shows thoughts on specific actions related to the current market environment.
(These are not recommendations or solicitations to take any action. This is for informational purposes only related to market extremes and contrarian positioning within portfolios. Use at your own risk and peril.)
Portfolio/Client Update:
Last week, the market rallied sharply on Thursday and Friday, not because of “good news” but rather “bad news” which increases “hope” the Fed will cut rates.
This is not a strong fundamental reason to own stocks.
However, we do expect there to be a “trade deal” of some sort next week, which should boost stocks in the short-term (through the end of the year). If such a deal is announced we will add to our sector and market index holdings accordingly.
We continue to maintain a defensive bias to portfolios. Please read the main body of this missive to see our allocations and reasonings, and why we continue to “rent” this rally, for now.
For newer clients, we have begun the onboarding process bringing portfolios up to 1/2 weights in our positions. This is always the riskiest part of the portfolio management process as we are stepping into positions in a very volatile market. However, by maintaining smaller exposures, we can use pullbacks to add to holdings as needed. We also are carrying stop-losses to protect against a more severe decline.
- New clients: Please contact your advisor with any questions.
- Equity Model: No change this week.
- ETF Model: No change this week.
Note for new clients:
It is important to understand that when we add to our equity allocations, ALL purchases are initially “trades” that can, and will, be closed out quickly if they fail to work as anticipated. This is why we “step” into positions initially. Once a “trade” begins to work as anticipated, it is then brought to the appropriate portfolio weight and becomes a long-term investment. We will unwind these actions either by reducing, selling, or hedging if the market environment changes for the worse.
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