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Migration

.2, 4.6, 11.4, 16.5, 4, and 10.

Those are the inches of snow recorded in Milwaukee from November 2017 through April 2018. Everything looks pretty normal – except for the last two numbers which normally would be reversed.

Those two abnormal April snowstorms lead to additional abnormalities in life. Typically on May 1 the hummingbird feeders and grape jelly go up on the birdfeeders and the winter woodpecker feeder comes down, but not this year.

Every year the spring migration has some rhythm to it. In late February the Sandhill cranes arrive; followed by the blackbirds and the Canada geese; followed by the tree swallows when there are enough bugs to eat; and finally by the hummingbirds, orioles, and warblers when the trees and flowers are finally out of their winter hibernation.

The last wave of the migration follows a wave of spring blooms from south to north, typically riding strong southerly breezes. According to the Wisconsin Bird Conservation Initiative, this coming weekend should mark the late arrival of orioles, warblers, ruby-throated hummingbirds, and rose-breasted grosbeaks in your backyard.

The financial markets also have a migratory pattern that goes from south to north and back again. But traders don’t live on bugs and flowers, they feast on earnings and optimism. If either is in short supply things head south.

After a bounteous 2017 and first month of 2018, optimism has faded. The good news is that earnings have remained strong, so if optimism starts to bloom the markets could migrate north again. Our current correction is now over 3 months old and it will take time for traders to begin their next migration.

Right now traders are in a holding pattern waiting for optimism to reappear. Our proprietary Market Mood Meter® shows that traders have been Startled for most of the last two weeks as they contemplate whether the near-term future will be filled with spring beauty or whether there is another snowstorm yet to come.

Do you remember May 10, 1990? Or do you prefer March 2012 ?

Securities offered through LPL Financial. Member FINRA/SIPC. Financial advice offered through Investors Advisory Group, LLC, (IAG) a registered investment advisor and separate entity from LPL Financial.

Past performance is no guarantee of future performance. In fact, the opposite can be true. The information contained in this report does not purport to be a complete description of the securities, markets, or development referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.

Market Mood Meter© Trend strength is determined using S&P 500 Index daily moving averages (DMAs) (8-21, 13-34, 21-55, 34-89, 55-144 and 89-233) to determine whether the short-term DMA value is higher than the longer-term DMA value. A daily moving average is the average price of the index over the indicated number of days. Trend is either Positive (8 points) if the short-term DMA is higher, Negative (0 points) if the short-term DMA is lower or Transitioning (4 points). A trend is Transitioning if the difference between the shorter DMA and longer DMA is between -.34% and +.34% of the shorter DMA. Maximum is 48 points when all trends are Positive.

Market Mood Meter© Momentum strength is determined using the same S&P 500 Index DMAs to determine whether trends are getting stronger or weaker calculated by dividing the difference between the shorter DMA and longer DMA by the shorter DMA. Momentum must be directional – rising or falling -- for 5 consecutive trading days to be Gaining (8 points) or Losing (0 points), otherwise momentum is considered Transitioning (4 points). Maximum is 48 points when all momentum is Positive.

Any opinions are those of IAG and not necessarily those of LPL Financial. Expressions of opinion are as of this date and are subject to change without notice. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein.

 

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©2018 Investors Advisory Group, LLC

Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through Investors Advisory Group, a registered investment advisor and separate entity from LPL Financial.

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