What We Were Reading , Watching, and Doing, this Week
Economy
The Leading Economic Index (LEI) from the Conference Board was down 0.5% in May, worse than expected
This was its third consecutive monthly decline after one increase in February.
This important indicator continues to signal that the direction of economic growth is still in question.
Stocks
The S&P 500 closed slightly higher for the week.
Year to date, S&P 500 up 14.60%.
Bonds
Yields rose slightly on the 10 Year Treasury, closing at 4.25% on the week.
January 2024 10 Year Yield 3.946%
Gold
The price of gold closed up slightly for the week, to $2,335.44 per troy ounce.
Up 13.3% YTD.
TECHNICAL UPDATE
Stock Market
Weight of Evidence
Two Important Indicators to Track in the Near Term
Modified Advance Decline Divergence Index
Stock market “breadth” or participation has always been an extremely valuable tool at market tops. As the market becomes overvalued as a whole, investors become more selective in their stock purchases.
The Advance-Decline (A-D) Line (cumulative total of daily advancing issues minus declining issues) is the most common tool to track breadth.
One of the limitations to using this tool as an early warning a correction, or bear market in stocks, is a change that was made was the implementation of decimalized pricing of stocks in 2000. (minimum price increments of 0.01 instead of 1/16). As a result, many measures of market breadth that had historically provided early warning, including the A-D Line, now appear to offer less of an advanced signal than in the past.
A well known market technician came up with a proprietary adjustment that solves for this problem, by making several adjustments, including adjusting for the effect of decimalization.
As a result, their adjusted A-D Line becomes a very reliable warning of an impending bear market or major correction.
Leadership
Lack of Selling on the Upside
This is a very bullish signal, based on a stock market that is rising, without any selling, has bullish momentum.
Historic Measures
Breached Key Levels Indicating Bullish Bias
January 2023
Breached Higher Levels of Selling
June 2023
Current Reading
More Bearish than June of 2023
Distribution
Indicates that investors are selling , even when the stock market is declining, and/or their positions are at a loss.
Historic Measures
Indicating Bear Market (Danger)
January 2022
December 2023
Current Reading
Neutral
Stanton Group Risk Management Current Net Long Positioning
There were no changes made in our Net Long Stock positioning within our model portfolios.
Please schedule a call to review historical and current positioning using our Core & Protect Risk Management Process, our research, and our model portfolios.
https://calendly.com/jstanton-1/stanton-group-introduction-with-john-stanton
Retirement Income Planning
"Potential Directions for Social Security"
Wade Pfau is a professor of retirement income in the Financial and Retirement Planning Ph.D. program at The American College and a principal at McLean Asset Management. He is also a principal at the Retirement Researcher website, where you can find his research on retirement income planning.
Reforming social security is a topic we follow closely in our practice.
Professor Pfau wrote this article to address the many concerns readers and clients have, about the social security program.
https://retirementresearcher.com/potential-directions-for-social-security/
Summer Fun for a Good Foundation
CASA (Court Appointed Special Advocate) is a nonprofit membership organization, which advocates for the best interest of children who have experienced abuse and neglect. They are composed of community volunteers who serve to protect a child’s right to a safe and permanent home. They are the child’s voice in court.
You can find out more about CASA Kendall County here. https://casakendallcounty.org/
Jill & I were invited to attend the annual Michael Turner Memorial Golf outing , supporting this great organization, on Thursday. Had a wonderful time, met some terrific people!
Thank you Lisa Coffey, of Lisa Coffey Law, https://lacoffeylaw.com/ for invitation!
John is the founder of The Stanton Group WP. With more than three decades of experience in the financial services industry, and through SeaCrest Wealth Management, LLC, serves as the Registered Investment Advisor Representative for clients, focusing on financial planning and the investment strategies to support their financial plan.
Based in Naperville, Illinois, John serves clients in Naperville, Plainfield, Darien, Aurora, Geneva, St Charles, and throughout the Chicagoland area.
Learn more about John’s services by visiting www.stantongwp.com
John can be reached at l 630-445-2380 or email JStanton@seacrestwm.com.
The Stanton Group WP provides investment advisory services through SeaCrest Wealth Management LLC, (the “SWM”) a registered investment advisor. SWM is a registered investment advisor (“RIA”), with the U.S. Securities and Exchange Commission located in the State of New York. SeaCrest Wealth Management, LLC can be reached at (914) 502-1900.
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