Too Much Turmoil – The HCM-BuyLine® Turns Negative

Too Much Turmoil – The HCM-BuyLine® Turns Negative

October 25, 2023

From the desk of Vance Howard:


The HCM-BuyLine® went negative on Friday, pushing us to reduce exposure to equities yesterday, and we will continue reducing exposure again today. There is a lot going on, not only from an economic point of view, such as the Fed raising rates 11 times and being embarrassingly behind on every decision, but also from a geopolitical perspective. Russia and Ukraine, China and Taiwan saber rattling, and Israel, our only true allies in the Middle East, against what appears to be everyone, as sad as it is.


Chart: TLT 1-year daily

The Fed has successfully crushed fixed income. Those of you who thought bonds were safe might need to rethink that. (TLT) the 20-year Treasury was at a high of $179.00 per share on 3/21/20 and is now at $84.00 a share. It will take someone who invested in those bonds in 2020 a decade to get back to even. That makes the stock market look a lot more attractive.

Chart: RSP 1-year daily

It is truly a bizarre market, with just 7 stocks leading the rally and not much more. The equal-weight ETF (RSP) of the S&P 500 is down -3.5%. If you have not been heavily invested in the magnificent 7, you in all probability have made no money or are down for the year on your investment.


Chart: SPY 1-year daily

We will reduce exposure and be patient and wait for the trend to turn back up. There will be opportunities, but for the time being, letting this storm pass is the prudent course of action.

Vance Howard

This communication is issued by Howard Capital Management, Inc. It is for informational purposes and is not an official confirmation of terms. It is not guaranteed as to accuracy, nor is it a complete statement of the financial products or markets referred to. Opinions expressed are subject to change without notice. Howard Capital Management, Inc. may maintain long or short positions in the financial instruments referred to and may transact in them as principal or agent. Unless stated specifically otherwise, this is not a recommendation, offer or solicitation to buy or sell and any prices or quotations contained herein are indicative only. To the extent permitted by law, Howard Capital Management, Inc. does not accept any liability arising from the use of this communication. Howard Capital Management is an SEC-registered investment advisor which only does business where it is properly registered or is otherwise exempt from registration. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability. Past performance is no guarantee of future results.HCM-022223-WW05 (02/2023)

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