Portfolio watch weekly update-June 19, 2017.

       

Your Portfolio Watch Weekly Update – April 04, 2016

Weekly Market Update by PLP Advisors

Once again last week, markets were more mixed with stocks rising slightly and metals markets falling.

The Dow Jones Industrial Average rose .53% while the Standard and Poor’s 500 advanced .06%.  Gold fell .90% while silver, the more volatile metal fell nearly 3%.
The rise in stocks and the decline in metals saw the Dow to Gold ratio rise to more than 17.  As long time readers of “Portfolio Watch” know, we are ultimately expecting this ratio to reach a level of 1.
Chart One below is a chart of an exchange traded fund that attempts to track the price performance of the Dow Jones Industrial Average.  Notice from the two trend lines drawn on this weekly price chart that the Dow is in a strong upward price trend.
The shallower uptrend line from the market bottom shows the Dow could correct in price to approximately the 18,000 range and still be considered to be in a technical uptrend.
The steeper uptrend line drawn on the chart from early 2016, shows that stocks could correct to under the 20,000 level and still be in a technical uptrend.
Bottom line is this, if stocks simply revert to either of these uptrend lines, stocks will remain in a technical uptrend but will decline in price from 7% to 12%.
Chart Two is a chart that shows the price performance of an exchange traded fund with the investment objective of tracking the price of gold.
Notice from the two trend lines drawn on the chart that gold remains in a technical downtrend from late 2011 to the present, although gold prices are close to breaking out of this downtrend to the upside.
On the same chart there is an uptrend line drawn from late 2016 to the present.  Our trend following indicators once again have gold in an uptrend so it’s our position at this time that gold could potentially move higher from here.
US Government Bonds rallied again last week with the yield on the 30-Year bond falling to 2.78%.
The US Dollar Index had the US Dollar remaining fairly constant last week at 97.16.
As we noted here, in the pages of “Portfolio Watch”, the US Dollar broke through a long term uptrend line a few weeks ago as observed on Chart Three.
Observe on Chart Three that this uptrend line began in mid-2014 and was penetrated to the downside just about one month ago.
As we stated in last week’s “Portfolio Watch” we believe that stocks, bonds, real estate and the US Dollar are all in price bubbles that will collapse at some future date.  At this juncture, it’s our belief that real estate may lead the decline followed soon after by stocks.  Should that happen, a temporary boom in bonds could occur which will create, in our view, the shorting opportunity of a decade, maybe a life time as yields on bonds will have nowhere to go but up from that point.
The cracks may be beginning to show in the real estate market.  May new residential building permits issues were the lowest in more than 12 months according to the Department of Housing and Urban Development.  That decline in spite of nearly record low interest rates and mortgage availability.
This stat coupled with the fact that existing home sales fell significantly in April is worthy of noting.  We believe that selling real estate at this point in time may be prudent and holding off on purchases of real estate may also prove to be a smart strategy.
The real estate market is beginning to look shaky as does the stock market as we discussed in last week’s “Portfolio Watch”.
This week we once again repeat our advice:  consider taking steps now to protect your open positions and consider using absolute returns type investment strategies.
Due to numerous requests, we are holding another New Retirement Rules class on July 15.  It will be held at the East Beltline campus of Western Michigan University beginning at 9:00 AM and concluding at 2:30 PM.
For more information or to register, visit www.NewRetirementRules.com.
The class is open to first time attendees only due to space limitations.  Thank you for your cooperation.
Make it a great week.


Source: http://everythingfinancialmedia.com/portfolio-watch/your-portfolio-watch-weekly-update

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