We’ve had a really nice rally since the intermediate term bottom hit the day before Christmas 2018. Each time we’ve seen a morning drop in stocks, buyers have stepped in and almost always ended the day with overall gains. As of this writing on Tuesday, January 22, at 9:50 AM Central, the S&P500 index is down 1% and US Small Caps and the International Stocks are down more. We’ll see what happens.
The rally has regained about half of the big 20% drop from all-time highs last Fall, but our indicators do not show up-trends for any asset classes except gold. Accordingly, we are treating Gold as our least risky asset class … both in terms of weekly volatility and trend. Since our methodology is all about managing risk, the least risky asset class gets the highest percentage portfolio allocation.
We are at another potential turning point for US Stocks. If stocks continue rallying and enter an up-trend they will “earn” a higher allocation of our portfolios. The same goes for bonds. No changes for now.
Have a great week.