Market Comments for Friday October 5th, 2018
Although three of the last four days have seen triple-digit moves in the DJIA, the blue chip indexes are virtually flat for the week, with the DJIA up +0.1% and the S&P 500 down -0.8%.
Under the surface, the technical situation is deteriorating. The Advance-Decline Line has weakened and are showing early signs of a negative divergence to the S&P 500. At the same time, the “Distribution” component of the Negative Leadership Composite has dropped to -54, with any reading below -50 to warrant action.
The economy is in better shape. Today’s employment report showed that the unemployment rate moved down to 3.7%, the lowest level since December 1969. However, there were 134,000 jobs created in September, which was less than economists had expected. The ISM surveys for manufacturing and services are firmly in growth territory.
Strategy: Although the economic outlook is bright, we are concerned about the weakness in our technical indicators, and thus FAC has reduced our Conservative Allocations within our Folio Methodologies to an approximate 67% invested allocation.
First Advisors Capital, Inc. (FAC) is an Investment Adviser Registered with the State of Alabama.
4956 Valleydale Road Suite 203 / Birmingham, AL 35242 / 205-991-8484
The information contained herein has been obtained from sources believed reliable solely for informational purposes but, is not necessarily complete and cannot be guaranteed. This communication may contain inaccuracies or typographical errors. First Advisors Capital, Inc.(FAC) does not render legal, accounting, or tax advice. Where performance data is shown, past performance is not an indicator of future results. This communication may contain non-public, proprietary, confidential or legally privileged information. Please contact FAC to obtain the additional disclosures necessary to make an informed decision including but not limited to FAC's: Adv. 2a, 2b, FAC Client Investment Agreements, Fee Schedules, Fact Sheets, and other important disclosures and disclaimers, before you invest.