Good Evening,
God blessed us with the bounce we were looking for today and a nice bounce it was….
NEW YORK (CNNMoney)Scared of a little geopolitical risk in the market? Tell your shrink, not other investors, because they won’t listen.
The week’s action left us with the following signals:C-Neutral, S-Neutral, I-Neutral, F-Buy. We are currently invested at 25/C, 75/S. Our allocation is now -3.56% on the year. Here are the latest posted results:
| 07/18/14 | |||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 14.4701 | 16.429 | 25.8496 | 35.0584 | 26.5897 |
| $ Change | 0.0009 | -0.0073 | 0.2626 | 0.4666 | -0.0422 |
| % Change day | +0.01% | -0.04% | +1.03% | +1.35% | -0.16% |
| % Change week | +0.04% | +0.08% | +0.56% | -0.20% | +0.33% |
| % Change month | +0.11% | +0.00% | +1.02% | -1.97% | -1.00% |
| % Change year | +1.28% | +4.37% | +8.27% | +4.12% | +4.01% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 17.2471 | 22.7005 | 24.5977 | 26.1524 | 14.8665 |
| $ Change | 0.0269 | 0.0839 | 0.1191 | 0.1495 | 0.0942 |
| % Change day | +0.16% | +0.37% | +0.49% | +0.57% | +0.64% |
| % Change week | +0.11% | +0.21% | +0.25% | +0.27% | +0.30% |
| % Change month | +0.10% | +0.01% | -0.05% | -0.12% | -0.17% |
| % Change year | +2.56% | +4.15% | +4.85% | +5.31% | +5.71% |
Here’s what the SPY looked like this week. Chart and analysis courtesy of Stockcharts.com.
After dropping just below the support of the short-term rising trend channel, price snapped right back up into the middle of the channel. Yesterday, Carl pointed out the possible double-top that is especially visible in the zoom thumbnail. Today’s rally has not rendered that pattern obsolete. but if price rallies above the two tops, then it would be time to reconsider the pattern.
Since it is Friday, let’s review the weekly chart. Last week price had managed to just break above resistance, but this week price ended up back inside the trend channel. The weekly PMO is still rising after the crossover BUY signal which is bullish, however the PMO has been whipsawing around and moving sideways since about May of 2013. A noisy PMO is not completely reliable.
Conclusion:As a consequence of a ‘news’ driven decline, a similar opposite reaction occurred today that basically recouped most of the losses that were incurred yesterday. The big turnaround caused some of our ultra-short-term indicators to climax. Short-term indicators are bullish. Intermediate term is still looking shaky as the indicators are continuing to decline and the weekly chart shows that last week’s small breakout was abandoned as price found its way back into the channel. The short-term rising trend channel will likely continue to define price movement for at least a short while until ultra-short- and short-term indicators reach overbought territory.
Some days there is a lot to write and some days the news and analysis that we look tells the story without my interjection. This one of those days. We prayed for a bounce and got it. Now we need to pray for some follow though. Our allocation is still -3.56% on the year resulting from the fact that we were whipsawed three times. That really shows you the kind of year that it’s been, as I hardly ever get whipsawed. You can really see how close the market has stayed between gain and decline by looking at the PMO on the charts we have been showing. It has really never been far from either a gain or a decline, making it difficult to be in the right place for any length of time. We’ve been using some different indicators lately as a result of the previously mentioned whipsaws and seem to be managing the situation better now as a result. It is my belief that we can still turn a profit on the year if we continue to use the current set of indicators. The bottom line is that we averaged about a 1.25% return both in Thrift and on the street today. A little bit more of that and we can get healthy in a hurry. Continue to pray for our allocation and God will take care of this group as he always has. Give Him the praise! Have a great weekend.
God bless,
Scott
