Good Evening,
This market has clearly become headline news driven. Not that it’s not always news driven to a small extent, but what I mean to say is that the market is now (for the most part) trading emotionally based on the major headline news which of course in this case is Ukraine and Israel/Gaza. So what does that mean for us? It’s simple: we pay your money and take our chances. Like most major headline news, you have to decide whether or not it is going to blow over in a short period of time or if the damage is going to go deep and last a while, as it did after 9/11. I am staying in the market at this time as I don’t see this as being insurmountable, at least not at this point. The charts are all still in good shape and there seems to be underlying support. Take today for instance: it could have been worse, but the dip buyers continue to show the resolve to drive this market off its lows. As far as I’m concerned, this news just makes a tough trading environment a little tougher. I may consider sitting out part of– or all of– September, but I’ll discuss that later as the time gets closer. Until then, I’ll try to squeeze this pig until it squeals…
Here’s a quote from Rev Shark that pretty much sums this market up. It was lifted from this mornings comments:“It just isn’t a market that supports a high level of aggressiveness. A strong bias in either direction cannot be maintained for long are you will be burned when we are jerked around. It is a market mainly for smaller, quicker trades rather than grandiose market timing calls.”
CNN Money
Stocks broadly fell Monday on concerns about violence in Gaza and Ukraine, but it could have been a lot worse.
The day’s trading 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 currently -3.56% on the year not including today’s results. Here are the latest posted results:
| 07/18/14 | Prior Prices | ||||
| 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 the chart for the day: (All Charts courtesy of Stockcharts.com)
S Fund: The chart is still neutral. However, it is beginning to show some stress from the recent selling. The 15 EMA crossed down through the 20 EMA as a result of today’s pricing. This coupled with the negative cross over of the PMO through its 20 EMA on or about July 10th can be considered bearish. I have annotated with a circle the area that the 15 EMA must cross through to generate a sell signal. We are using the 15 EMA as one of our indicators due to the fact that it takes longer to react to selling than does for instance the 5 EMA. This should prevent us from being whipsawed again in 2014, but should also allow us to get out of the market without incurring too much damage should it turn down. A lot of technicians routinely use the 20 EMA as their primary indicator, but it is only in the strongest of bull markets that I will do so and this market while it has been strong is weakening. Also worth noting is that I use two to three more indicators on my personal charts but do not share them here very often as they are extremely technical in nature and would require a lot of explanation that would only bore you to tears. Thus, I put out the signals listed above which is really all that most people want to know. There are a lot of people that use them in their non-TSP retirement plans and have put up some pretty good numbers if I may say so myself.
The bullish argument is that the bears can’t seem to gain any momentum. The bears are saying that the bulls can’t get any steam either. To use a chess term, it’s a stalemate right now and you can put whatever spin on that that you want. If you are a bull you can say that it’s healthy consolidation. If you are a bear you can say that the bulls are stalling out and a top has formed. Either way, I’ll keep praying for God’s guidance and reading my charts. Have a nice evening.
God bless,
Scott
