This past quarter (Q2/2022) the S&P 500 breached bear market territory from a volume analysis perspective. As a result, our risk overlay’s protection measures triggered. While our first mandate is risk mitigation, our second objective is to attempt to identify and participate in newly emerging bull markets which can be spawned from capitulating bear markets. This past quarter saw two possible capitulation bottoming events, one early in May the other in June. Together, these signal form an extremely rare “W” Volume – Price Confirmation Bottom.

Our responses to these capitulation signals are only temporary, giving time for capital flows to potentially reverse course. However, if the flows of capital continue out of the market, our risk overlay remains on duty.  Should capital flows remain under pressure, the risk overlay fades equity exposure over the course of time. At the end of the second quarter, capital flows were strongly negative and weakening.  In the aggregate, our analysis suggests being opportunistic short term as the market may be deeply oversold. However, we are also prepared to gradually move back to safety unless internal market conditions significantly improve.

Updated: 7/5/2022

Historical references do not assume that any prior market behavior will be duplicated. Past performance does not indicate future results. This material has been prepared by Kingsview Wealth Management, LLC. It is not, and should not, be regarded as investment advice or as a recommendation regarding any particular security or course of action. Opinions expressed herein are current opinions as of the date appearing in this material only. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate their ability to invest for the long term. Investment advisory services offered through Kingsview Wealth Management, LLC (“KWM”), an SEC Registered Investment Adviser.