Good Afternoon, I just posted some really good news on our page. The US and the EU just agreed to a trade deal which will leave a 15% tariff in place on imported goods and services from the EU. This is great news coming on the heels of a big trade deal announced with Japan earlier this week. It is beginning to look like we might survive this tariff situation with new trade deals on most of the major players in place. I expect that others will follow slowly with each one providing the market with a small boost! There are two other factors that will shape the market this week. One will give the market a boost and the other not so much…. Investors continue to focus on positive earnings as companies  report excellent 2nd quarter results. More than 82% of the 169 S&P 500 companies that have reported to date have beaten Wall Street’s expectations, per FactSet data. In my experience any thing over 75% is really good. So we have trade deals and earnings reports providing tail winds for the rally, but what about the FED meeting this week? The FED will be meeting this Tuesday and Wednesday and it is widely expected that they will keep interest rates steady once again. That is the “not so much” that I was talking about above. The market has been hoping that the Fed would decrease rates for some time now which the Fed has not done due to a concern about inflation. Up to this point I have agreed with them. Up to this point, but no longer. It’s time for the Fed to continue decreasing rates. The market expects it, consumers need it, and it will damage market sentiment if they don’t do it. I’m not sure if this has anything to do with Jerome Powell’s ongoing disagreement with President Trump or not, but he needs to forget his pride and lower the rates. It’s time!!!! My expectation is that he will be stubborn and not reduce rates until November which absolutely will slow the market down. I can understand being cautious, but if inflation does surprise us and move higher, they can simply reverse the rates at that time. There is such a thing as an emergency meeting. They have done it before when there was a need! Enough of that. You get the picture. It looks like the Fed will cancel out the other good things that are going on right now. The charts are moving sideways with a slight upward bias at this time. Yes, I realize that that the S&P 500 and the Nasdaq posted new records this week, but we must always keep in mind that they are weighted. The average small cap and tech stock struggled this week. Never forget that small caps in particular are a good early indicator of where the market is moving. As I have often said, they are the canary in the coal mine and right now they are struggling just a bit. No rally will last long without small caps. What would turn them loose? Why an interest rate decrease of course. Are you listening Mr. Powell. This is not about politics! As Bill Clinton once said. “It’s about the economy stupid!!!” So what am I really saying about this small cap performance? What are small caps telling us? That stocks will pull back in the not so distant future. I am expecting a pullback in mid to late August with a resumption of the rally sometime in early November. I feel certain that the only thing that will change some version of that scenario taking place would be a decrease in interest rates and that doesn’t seem likely at this time. We’ll see what happens. For now we will remain cautiously  invested at 100/S.

Friday’s trading left us with the following results. Our TSP allotment posted a nice gain of +0.66%. For comparison, the Dow added +0.43%, the Nasdaq +0.19%, and the S&P 500 +0.42%.  FYI the I Fund was slightly in the red. So we had them all covered today! Praise God for that!

S&P 500 posts fifth straight record close this week, powered by solid earnings: Live updates

Last weeks action generated the following signals: C-Buy, S-Buy, I-Buy, F-Buy. We are currently invested at 100/S. Our allocation is now +14.22% on the year. Here are the latest posted results:

Now lets take a look at the charts. All signals are annotated with green circles. Please click each link to view the respective chart. If you want to learn more about technical analysis check out the website StockCharts.com.

C Fund:

S Fund:

I Fund:

F Fund:

We just need to keep watching our charts, running our system, and praising our God. That’s all for this week. Have a nice evening and may God continue to bless your trades!

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.