Market Commentary for September 2019

"I remain a bull... "

By Alan Hull

This commentary is in part or entirely created using extracts and comments from my weekly Blue Chip Report. For more information about the Blue Chip Report, including subscription details and a recent sample report, go to Blue Chip Report

Last month I described myself as a cautious bull. And this month I remain a cautious bull. And yes...this is even in light of all the events that have occurred over the last month from Trump tweets, Bond yield inversion, the G7 accord on the slippery slide, etc. It's especially times like this that we must trade what we see and not get caught up in all the hype. Thus I am not so much interested in what happens, as how the markets react to what happens.

Using the U.S.'s SP-500 index as a barometer (as the best overall indicator of world markets), all the machinations of the past month have it testing its lower boundary. In fact it has not only tested it, but it has forced it on to a slightly lower trajectory. Thus markets are always adjusting themselves to account for all of the latest known information...and the latest information hasn't been entirely positive.

So a month ago the blue trend line in the above chart was steeper and I do think that Trump had a very large part to play in it's re-alignment. And markets have to factor in what has occurred in both quantitative and also qualitative terms. By this I mean that the tariffs and currency movements are one thing, but the markets also have to factor in the growing uncertainty around President Trump's behaviour.

And this is where it gets both interesting and tragic....interesting trying to interpret & predict Trump's actions and tragic to realize the best analysts in the world are trying to interpret & predict Trump's actions. But I think investors can largely circumvent all this open ended analysis by looking at the charts. These are the collective response of the world's investors. And what I see in very robust terms in the SP-500 index is a rising trend...

I see a market that is making higher highs and higher lows...and that is the definition of a rising trend. So I remain a bull, until and unless this picture changes. I am still holding shares and stocks in Australia and the U.S., well aware that we are in the late stages of one of the largest global bull runs in history.

And paradoxically, I strongly suspect it will continue well into 2020...because Trump wants it to. Thus it is very rare that a U.S. economy or markets have ever faltered in the lead up to an incumbent President running for re-election.