Good Evening, And this evening it is truly a GOOD EVENING. I can’t say that about most of the others this week. Although, I won’t be totally negative. God is good everyday. Even on days when the stock market plunges 1000 points in a day. Keep praising Him and in the end game He’ll always be there. I know that this correction has been tough. I believe the worst is over and we will move up from here. Today was another day of wild swings. I know my account on the street was up and down over a percent twice! I want you all to understand one thing. When I meant we’d have more volatility than we have had in the past seven years I didn’t mean this! These swings are a bit extreme to say the least. So what’s to blame?? Interest rates? For normal volatility yes but not for this. No indeed. As I have already said, there was no fundamental reason for this correction!! At least not the way that it happened. Sure stock valuation was a little high and sooner or later the market had to correct. But not in four days!!!! I wrote recently that the market wouldn’t just fall apart, that we would have time to react, to get out and short the market and make some money from the decline. Well I let you down. I was wrong. I was thrown a curve ball. I did not even have knowledge of the volatility funds that were trading on the market. I’d like to think that this is because I’m not dumb enough to ever look for an investment like this and I use the term investment loosely. When these funds unwound hedge fund managers were forced to sell good stocks (the ones you and I own) to cover their losses! And believe me, they had a lot of money invested in these funds, enough to push the market around and push it did. They got burned and I’m glad they did!!!! If I was going to describe one of these funds to the best of my ability I’d have to call it a bet. That’s right just like a bet that you place at the casino. Not an investment, I’d never call it that! There are 12 or 14 of these funds and what they do is bet against the VIX (Volatility Index). In other words they bet against volatility. By buying shares of one of these funds you are betting that there will be no volatility. This was the brain child of several investors that wanted to take advantage of the placid market that we had during quantitative easing. What I want to know is how the SEC ever approved of something like this? Are you kidding me! You don’t even own a security of any kind. Your betting that there will be no volatility! These people had to be insane. I know that investing is an addiction. I freely admit that an offer myself as as example. But you might as well have made a Super Bowl Fund where you could buy shares in the team that you think will win. This is gambling plain and simple and should have never been approved by the SEC. SEC, if you happen to see my blog ban these dangerous products. They have no business effecting the hard earned retirement money of so many American workers. These aren’t investments. They are a joke!!!! And while your at it ban these blasted computer algorithms too. If you don’t they will cause the collapse of the entire world financial system some day! Now I’m done. You bet I’m upset. The more I looked at this the madder I got. It was totally unnecessary. The good news is that when this all shakes out that the market is primed to move back up. Unlike 2000 and 2008, there was no fundamental reason for this decline. Therefore, there is nothing to keep the rally from continuing when this is over. Here’s to getting back to normal! And normal short blogs too, right?
The days wild trading left us with the following results: Our TSP allotment snapped back with a gain of +1.49%. Praise Jesus! For comparison, Dow was up +1.38%, the Nasdaq +1.44%, and the S&P 500 +1.49%.
The days action left us with the following signals: C-Neutral, S-Neutral, I-Neutral, F-Sell. We are currently invested at 100/C. Our allocation is now -4.27% on the year but that does not include today’s gain. Here are the latest posted results:
| 02/08/18 | Prior Prices | ||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 15.581 | 17.7643 | 36.3632 | 46.4321 | 29.9977 |
| $ Change | 0.0011 | -0.0234 | -1.4099 | -1.5488 | -0.7437 |
| % Change day | +0.01% | -0.13% | -3.73% | -3.23% | -2.42% |
| % Change week | +0.04% | -0.13% | -6.53% | -5.65% | -6.16% |
| % Change month | +0.06% | -0.81% | -8.55% | -7.30% | -7.41% |
| % Change year | +0.26% | -1.94% | -3.32% | -4.20% | -2.78% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 19.443 | 26.6021 | 30.1178 | 32.6658 | 18.857 |
| $ Change | -0.1280 | -0.3079 | -0.6147 | -0.7915 | -0.5209 |
| % Change day | -0.65% | -1.14% | -2.00% | -2.37% | -2.69% |
| % Change week | -1.24% | -2.19% | -3.85% | -4.55% | -5.18% |
| % Change month | -1.63% | -2.86% | -4.98% | -5.87% | -6.65% |
| % Change year | -0.55% | -1.07% | -2.01% | -2.43% | -2.78% |
Wow, You almost need sunglasses for all that red! Now lets take a look at the charts. All signals are annotated with green circles. If you click on the charts they will become larger.
C Fund:
S Fund:
I Fund: The I Fund moved back to a Neutral signal today when the SCTR climbed back above 40.
F Fund:
Lets all pray that this market is putting in a bottom. Keep a close eye on your charts. We may not totally be out of the woods yet. That’s all for this week. I’m worn out! Market corrections are no fun. Have a great weekend and may God continue to bless your trades.
