Good Evening, Dare I say four in a row? I guess I will. Four days of big gains in a row! During the recent correction we talked about how it was important not to sell unless it was absolutely necessary because of the potential for the machines to run the market back up in a hurry leaving those who sold in the dust and playing catch up. Again, with God’s guidance we called it right. That’s exactly whats taken place. Now that the correction is over, if you look back on it, it was just a normal bull market correction with the exception of one thing. The speed of it all took everyone by surprise. With the exception of 911 and the flash crash I have never seen a run of the mill correction move so deep so fast. We’ve already analyzed the reasons which were #1 computer algorithms that have increased in use and #2 recently invented exotic trading instruments designed to short the VIX. The moral of he story is that you have to have a contingency plan and stick to it. I’m sure my friends in law enforcement and the military are comfortable with that concept. You must be disciplined and not sell until you are supposed to sell. We knew there was no fundamental reason to support a bear market or even a deep correction for that matter. We knew our charts were telling us that the market was oversold. We knew that with the exception of bear markets that the 5 EMA practically never crosses though the 200 EMA on the chart for the S&P 500.  We knew that the fundamental and technical indicators were telling us not to sell but that our heart and emotions were. We maintained our discipline regardless of our emotions and now we are being rewarded for it. We still have all our gains from 2017 in tact and now have the potential to add to them. For those of you who have not been through a correction before, now you know what one is like. Learn from it. It’s never easy to play chicken with a bear but in a normal market that is what you have to do. What’s important is that your account balance lows are higher and that your highs are higher. If you expect your balance just to grow and never fluctuate you are living in a dream world and probably need to put your money in a pass book savings account. You can’t have your cake and eat it too. If your going to make money then stocks are still the best way to do it and they are relatively safe as long as you are disciplined. That said, there is nothing that is risk free. We use technical analysis to manage risk not to prevent it. Yes, we came very close to having to sell. Yes our balance would have dipped around 13%. That was the worse case scenario. If we had entered a real bear market of -20% or more we would have had our powder dry for the way back up and I’d remind you that the last two bear markets dropped twice that much. When you look at the whole picture we would have been fine. By staying invested we had the gains to cover the turn. That’s the way it works. Let there be no doubt that there will always be volatility in the market. If you manage things right you will always keep most of your money. If you feel like you have to have it all right now and can’t afford that kind of fluctuation, then put it in the G or the L Income Fund. The absolute bottom line is this. Regardless of your situation, learn from this correction! It is valuable experience that will serve you well. And don’t forget the most important aspect of the whole process. Pray for God’s guidance in whatever you do. He has never failed me yet!

The days trading left us with the following results: Our TSP allotment gained another +1.21%. For comparison, the Dow added +1.23%, the Nasdaq +1.58%, and the S&P 500 +1.21%. Thank God for another great day!

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 +1.39% on the year. Here are the latest posted results:

God bless, Scott 

 

 ***Just a reminder that you can review the performance of our allocation at the Web Site TSPTALK.com in the autotracker section under the screen name KyFan1.

 

 

I produce and publish this blog as both a ministry and for the benefit of any Federal Government Employee. This is done to offer you some guidance as to how to approach your retirement more financially successful. When it is time for you to retire, I recommend you utilize the services of a Professional Money Manager, who works with a reputable investment firm. He understands the guidance you have already received and he can manage your savings assets utilizing a more advanced investment program into the future. 

 

If you would like to receive more information about this introduction, please feel free to contact me at  [email protected].