Trade Wars

3/23/2018 8:53 AM

Dear Friends,

I like to look at charts when the news is sensationalized and sending everyone in panic.

We do not like to focus on the bad news du jour (trade wars, presidential investigations, scandals, etc.).

The charts sift through all the noise and tell us pretty much all we need to know.

Let’s look at the daily Dow Jones Industrials Chart below – I make these observations:

  • We are in a wider trading range (look at the green arrows I have inserted), the distance between the long-term trend line (200-day SMA red line) and the intermediate-term trend (the 50-day SMA blue line)

  • The red line – the long-term trend line – the most important trend:

  • is sloping upwards

  • prices remain above the trend line

  • these are both indications that the uptrend remains intact

  • Stochastics (the upper part of the chart) is getting to 20, oversold reading.

  • green circles denote how the market bounced up off a low stochastics reading in February

  • The closing price of 23,957.80

  • is above the 200-day SMA, the long-term trendline of 23,345.37, that’s a bullish sign

  • is above the previous low of 23,400 made in February – a bullish sign

What to do?

1. Nothing

2. Lighten up, please no more than 20% change in your portfolio on any one day (e.g., if you are 80% equities, do not move to less than a 60% position in one day) OR

3. Buy the dip

Call us if you are concerned – or email us at

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