March 2, 2018 glacierinvest

As you’ve surely read by now, February was the first losing month for all asset classes (except cash) in over two years. That’s quite a remarkable run of returns and low volatility for all asset classes.

A quick look at longer-term trends for US large cap, small cap and tech stocks shows all three are approaching their 12-month simple moving average trend lines. While there is no silver bullet sell signal, this is a fairly widely known and followed indicator so any break in trend could end up being somewhat of a self-fulfilling prophecy.

As of right now, small cap stocks are the closest to breaking trend at 2.4% above the 12-month simple moving average. Large cap stocks are 4.4% above trend while tech stocks are 8.8% above trend.