03/26/14

Good Evening,

I don’t care what anyone says. This market is not healthy. You can look an the indices, you can look at individual stocks, and you can look at bonds. None of them tell the story individually. However, when you take a careful look at the whole picture you see a market that is artificially propped up by the seemingly endless flow of cheap FED money. You see a market that is in need of a rest. You see numerous charts throwing up yellow flags that could turn into red flags in a heartbeat. Yes, if you look at the broad picture a little money is being made, but that money is rotating from sector to sector. The overall character of the market has changed and it may favor day traders, but it does not favor prudent money managers. Nevertheless, it will be those prudent managers that will come out on the top in the end because they will allocate money in defensive sectors that may not necessarily be working now, but will work when that dreaded “real correction” comes. So what am I saying? Be careful, caution is warranted. Do not walk away from your investments or set it and forget it with the warm weather and vacations approaching. That could be a mistake that you will live to regret. Yes, you should still try to make money, but you should also be ready to play defense until this correction comes. That my friends is the price of doing business in this current market. Now on to today’s results…..and they were ugly.

 

Facebook, Candy Crush lead markets down

 

 

Today’s sell-off left us with the following signals: C-Neutral, S-Neutral, I-Neutral, F-Neutral. We are currently invested at 36/C, 42/S, 22/I. I wouldn’t have said this a week ago, but I wish we had more in the I-Fund today. Our allocation is -1.35% on the year not including today’s results. Here are the latest posted results.
03/25/14
Fund G Fund F Fund C Fund S Fund I Fund
Price 14.3646 16.0392 24.2174 34.5032 25.1907
$ Change 0.0009 0.0052 0.1089 -0.0103 0.2123
% Change day +0.01% +0.03% +0.45% -0.03% +0.85%
% Change week +0.03% +0.10% -0.04% -1.18% +0.51%
% Change month +0.15% -0.31% +0.46% -0.91% -2.75%
% Change year +0.54% +1.89% +1.43% +2.47% -1.46%
  L INC L 2020 L 2030 L 2040 L 2050
Price 16.9367 21.9657 23.659 25.0626 14.1902
$ Change 0.0173 0.0572 0.0755 0.0890 0.0575
% Change day +0.10% +0.26% +0.32% +0.36% +0.41%
% Change week +0.01% -0.01% -0.05% -0.08% -0.09%
% Change month -0.01% -0.34% -0.47% -0.57% -0.70%
% Change year +0.71% +0.78% +0.85% +0.92% +0.90%
Small caps are taking a beating this week with the S Fund dropping  a whopping -1.43% today. The I fund broke even and the C Fund suffered a moderate loss coming in a -0.70%. The F fund was the lone bright spot for the day earning +0.34%. The S Fund currently has taken over the honor of having the weakest chart which had previously been held by the I-Fund. Here’s what it looked like for the day.
The S Fund has now clearly broken below the rising wedge pattern which is normally a bearish pattern. The next level of support is somewhere in the 82.50 range. In a normal market  that would be my target, but given the propensity for V shaped bounces resulting from the FED money, that is not as reliable target as it usually would be. It could easily turn back up on a dime given those circumstances, squeezing everybody that has taken a short position as it did back in January. The chart is currently in a neutral position, but that is somewhat precarious as the 5 EMA passing through the 50 EMA is all that it needs to conclude a sell signal. We will be watching that closely and will adjust our allocation if it takes place. Take note: we use different indicators in different situations. The same rules may not apply when you’re looking to buy….
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No doubt this is a frustrating market. The topping process is never pleasant, but this time it is much worse because of the manipulation of the market by the FED. All we can do is run our system and depend upon God. He will never fail us! That’s all for tonight! Have a great evening.

God bless,

Scott8-)



Written By

Scott Grimes

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