Attention: The 401k plan manager will no longer appear in the newsletter in the next couple of weeks. However, the link to the website will remain for your convenience. Be sure to bookmark it in your browser.
As noted last week, the market finally bounced solidly off of support and broke above the overhead resistance at the 100-dma and the 50-dma. The triggering of the underlying MACD “buy signals” suggests we have entered into the seasonally strong period of the year.
However, our weekly signals continue to suggest some caution despite the current short-term bullish improvements. There are currently several important catalysts that could derail the market rally over the next couple of months, the prominent of which is the Fed.
In the short term, we suggest maintaining exposures in plan portfolios and putting stored cash back to work in your selected allocation model. While we have not removed international, emerging, small and mid-cap funds from the allocation model, we suggest avoiding these areas for now and moving those allocations to domestic large-cap.
If you are close to retirement or are concerned about a pickup in volatility, there is nothing wrong with being underweight equities. There is likely not a lot of upside in markets heading into next year.
If you need help after reading the alert, do not hesitate to contact me.
Model performance is a two-asset model of stocks and bonds relative to the weighting changes made each week in the newsletter. Such is strictly for informational and educational purposes only, and one should not rely on it for any reason. Past performance is not a guarantee of future results. Use at your own risk and peril.
Have a great week!