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Weekly Economic and Stock Market Commentary: March 28, 2022


Weekly Economic and Stock Market Commentary: March 28, 2022

As for the stock market specifically:

We had another good week in the US markets last week. Technology stocks continued the bounce off what is hoped to be a bottom.

I am going to attempt to keep the article short this week.

We know that as much as I enjoy sports, this is not a sports commentary. However, in the basketball tournament, three of the remaining four teams were seeded 1 or 2. The 15 seed lasted longer than any other 15 seed did, but is out. The relative strength outlier is a number 8 seed.

The moral of the story is to stick with relative strength – those investments at the top of the relative strength matrix. They are there for a reason.

Moving on from sports as a metaphor for investing, to actual market analysis, I saw two very good things occur last week.

First, the major market averages made consecutive buy signals, giving confirmation that demand is returning to the markets. Second and very important, the relative strength relationship of equity vs fixed income has now flipped back to favoring equity (ie: stocks over bonds). I’d like to see confirmation with the equity vs cash indicator flipping too, and while it has yet to flip, it is only a fraction away.

The bullish percent numbers, as well as several of my other indicators continued their march downfield last week. Things are in good shape at this point, and we will continue with WEALTH ACCUMULATION strategies.

Remember, Xs mean OFFENSE or wealth accumulation, while Os mean DEFENSE, or wealth preservation.

Below is where our indicators stand as of March 25, 2022 (Courtesy Dorsey, Wright, and Associates).

On a general note:

There were no economic reports of substance to reach my inbox last week. That said, contact me for help or if you have any questions.