We held our March Monthly Strategy Session on Monday night. Premium Members can access and rewatch it here.
Non-members can get a quick recap of the call simply by reading this post each month.
By focusing on long-term, monthly charts, the idea is to take a step back and put things into the context of their structural trends. This is easily one of our most valuable exercises as it forces us to put aside the day-to-day noise and simply examine markets from a “big-picture” point of view.
With that as our backdrop, let’s dive right in and discuss three of the most important charts and/or themes from this month’s call.
Dynamic Portfolio Update: Our asset allocation models are tilting away from commodities, so we sold GLD in our cyclical portfolio (and replaced it with mid-cap equity exposure). With tactical risks rising, we raised some cash in our tactical opportunity portfolio.
As good as the market looked in January, it looked that bad in February. The month began with the technical conditions for the re-birth of a bull market being met, but by the end of the month there was still little evidence of bull market behavior. If the Q4 turn is going to prove resilient, it’s time for the bulls to step up and show that the path of least resistance is indeed higher. That means firmly embracing a rally that has faltered under the ongoing weight of macro concerns and is on the cusp of breaking down.
Our Weight of the Evidence Dashboard fills in the details and includes a few charts that have our attention heading into March.
Last night was our Live Conference Call that I host at the beginning of each Month.
It gives us an opportunity to take a step back and identify the direction of primary trends.
This is helpful, because without understanding the environment we're in, how could we possibly pick and choose which tools and strategies to incorporate?
This step often gets forgotten about by investors.
Many would rather just shove their strategy down the market's throat whether it makes sense for that environment or not.
I find that foolish.
One chart that I thought told an important story last night was the Nasdaq Composite plotted with the New Highs - New Lows list.
It shows the bottoming "process" taking place beneath the surface:
