Harbor Technical Market Review 2/9/18 update

Harbor Technical Review based on today 2/9/18 at 2:00pm cst

After multiple years of strong positive returns in equities, the markets are finally giving back some of those gains with large volatility swings (see 4Q quarterly report).  The S&P 500 still remains inside of a 6 year rising channel and now has the S&P testing both it’s 200 day moving average and a shorter term 2-year rising support at 2540. This 10% decline over a couple of weeks has rarely happened in the past 100-years and it has effected even the safer areas of the market (currency, bonds, reits, healthcare, utilities) as they were not immune to the move downward.

Here is an update of some of our charts we posted weekly on our website :

Short Term Long Term
Bonds (Agg) Bearish Bearish (Feb ’18)
US Large Equites (S&P 500) Bearish Bullish (Mar ’16)
US Sm. Equites (R2000) Bearish Bullish (Nov ’16)
Int’l Equities (MSCI EAFE) Bearish Bullish (Dec ’16)
Emerging Mkt Equities  Bearish-new Bullish (July ’16)
Commodities Bearish-new Bullish (Sept ’17)
Gold Bearish-new Bullish (Dec ’17)

 

Bottom-line: As of today, even though the decline has been big and surprised several people, the fundamentals and technicals behind this move are still in place. In the past, when we have seen similar moves, it turned out to be a tremendous buying opportunity.  However, anticipate continued volatility in the short-term as the market and traders analyze all the data and will probably re-test the lows and support levels multiple times before a bottom is reached.  We will continue to monitor this daily and if anything changes, we will notify you via email.

Have a great weekend.

Jim Stewart, CIO

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