Good Evening, The character of the market definitely changed last week. Several of the indicators that I follow outside of My TSP Guide moved to the fence with two in particular actually moving to a sell signal. These moves were extremely similar to what I saw last September. At that time I chose to ignore the indicators in favor of strong fundamentals…….. never again. I said when the warning signs flashed again I would take defensive action fundamentals or no fundamentals and that is exactly what I did. As of the close of business today our allocation moved to 100/F. With five successive days of selling the market was primed for an oversold bounce and that is exactly what we got! We could not have asked for a better exit. So where to go now? Nobody and I mean nobody knows the future. That said , there are only three routes this market can take. #1. If today was just an oversold bounce then the market will head lower. As I already noted the character of the market changed last week. However, that doesn’t mean it won’t change back. Whatever happens you will need to sit back and watch more than one or two days to make a determination. If you watch then it is a whole lot better to watch from a position of relative safety than to risk sizable loss. Yes I understand we could forgo some gains but those gains should be considered insurance. You can liken this to seeing a funnel cloud. When the warning signs flash are you heading to the basement?? Well the bells and whistles were starting to go off last week and that’s the reason I made the move. Remember Again! It’s not what you make that’s important it’s what you keep!!!!! We still have a profit on the year and if we are patient we can add to it. Of course that means that we look for an entry point back into stocks preferably after a pullback. We must make every effort not to chase overpriced equities higher. Sometimes that can’t be avoided but most of the time it can if one remains patient. The other two market scenarios are obvious… #2. The market trades sideways until a market moving event such as news of a trade talks with China moves the market up or down. This is what was happening prior to the five days of selling that we had last week. And last but not least #3 The market puts in a V shaped bottom and moves another leg higher. I listed this one third because I find it the least likely to occur given the uncertainty of the trade negotiations and the world economy. Also, an investor has to ask…..how much is a possible trade agreement with China already priced in? Will there be a sell the news reaction if and when an agreement occurs?? That is a definite possibility!!!! I favor the first two scenarios in that order. Only time and our charts will tell.

The days trading left us with the following results: Our TSP allotment posted a nice gain of +1.58%. For comparison, the Dow added +0.79%, the Nasdaq +2.02% and the S&P +1.47%.  Praise God for a great day!

The days trading left us with the following signals: C-Neutral, S-Neutral, I-Neutral, F-Buy. We are now invested at 100/F. Our allocation is now +5.45% 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  KyFan1@aol.com.