Good Evening,
The correction goes on in a mighty way. Thank God that again we are in the right place!
Dow tumbles 326 points on weak data
The days selling left us with the following signals: C-Sell, S-Sell, I-Sell, F-Buy. Our current allocation is 10/G, 90/F. We are off -2.71% on the year so far. Here are the latest posted results:
| 01/31/14 | Prior Prices | ||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 14.3173 | 15.9903 | 23.0515 | 33.0278 | 24.5333 |
| $ Change | 0.0010 | 0.0177 | -0.1493 | -0.1756 | -0.1277 |
| % Change day | +0.01% | +0.11% | -0.64% | -0.53% | -0.52% |
| % Change week | +0.05% | +0.30% | -0.41% | -0.30% | -1.34% |
| % Change month | +0.21% | +1.58% | -3.45% | -1.91% | -4.03% |
| % Change year | +0.21% | +1.58% | -3.45% | -1.91% | -4.03% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 16.7453 | 21.4534 | 22.981 | 24.2512 | 13.6826 |
| $ Change | -0.0182 | -0.0639 | -0.0876 | -0.1063 | -0.0679 |
| % Change day | -0.11% | -0.30% | -0.38% | -0.44% | -0.49% |
| % Change week | -0.07% | -0.31% | -0.40% | -0.46% | -0.54% |
| % Change month | -0.42% | -1.57% | -2.04% | -2.35% | -2.71% |
| % Change year | -0.42% | -1.57% | -2.04% | -2.35% | -2.71% |
According to Friday’s chart, the reverse flag is now in play. The target will be a market drop the length of the flag staff which should put us at around 1700 for the S&P 500. Once that pattern has executed, we’ll look for the next thing coming on the charts. I don’t even want to speculate at this time what that might be. Here’s what Carl Swenlin has to say about it:
Looking at the last five daily bars on the thumbnail chart, we can see that it has been a rocky week; however, a trading range was maintained. That’s the good news. The bad news is that it looks as if we have a reverse flag in progress, and that is a bearish pattern.
Conclusion: Yesterday it appeared that the SPX was launching into another rally, but today it got smacked down. Whereas I had settled on two possible bullish outcomes, I now see a third possibility, but it is bearish. Still, the market maintains the ability to rebound from intraday oversold levels, a fact that is the bane of the short sellers.
If I am correct, our current allocation will look real good when this correction is over. You must have patience when you are dealing with a market like this one. Remember, it’s not what you make, it’s what you keep! The trader with the most patience will come out with the best return in the end. Buying and holding has worked for the past two years, but as I have been saying, 2014 is a bird of a different color. Those of you that have found it so easy to set it and forget it the past 2 years will find a difficult road to travel this year. Those of you that have been with me from the beginning won’t have any problem dealing with it. We have seen this before. It’s a normal market and normal rules apply. That’s all for tonight. May God continue to bless your trades. Have a nice evening!
God bless,
Scott
