Good Evening, Today was a day when the market was deceptive. At first glance it would look like a pretty good day. The Dow and the S&P where up nice and the Nasdaq didn’t really lose anything. Good day right? Not if you know anything about whats going on. A few big caps managed to cover up a lot of poor action under the surface. I guarantee you that for the most part the media will miss it. The truth of the matter is that small caps and tech which have been such strong leaders as of late sold off. Renewed concerns and uncertainty over tariffs led investors to increase their cash levels. So what do they sell when they are looking to raise cash? The stocks where they have the most profit made of course! The end result is that if you where invested in the correct areas to make money up to this point then you were in the wrong place today. There was no being in the right place yesterday and today. It was yesterday or today. You say but Scott, the C Fund gained around a half a percent today. I got killed in the S Fund!! My reply is that year to date the C Fund is up 6.06% and the S Fund is up 9.45%. You tell me, if you closed your books out today which fund would you want to be invested in??? My point is not to defend our allocation. Sometimes we are wrong just like everyone else. My point is to teach you how to assess what is really going on in the market. Today the action under the surface was terrible and I just gave you the reason why. But Scott the S&P was up a half a percent!!! Your looking at the wrong thing!! You need to be focused on the character of the market period! There is nothing that’s more important than that. It gives you the best indication of where you might be heading. You accomplish this by looking at your charts. Not just a chart but the charts! Large caps, small caps, mid caps, tech, bonds all of it. You can start by getting a feel for what your invested in. Take the S Fund for instance. We have noted many times how it is made up of mid and small cap stocks. Its the only play we have in that area in TSP. It went down and went down hard today. You’ll never hear about it form the media and if you do it will only be a small blurb. So small caps were down. Take a look at today’s market breadth and you will really see the picture.  If you look at the big picture  you will see that there were around 3200 stocks up and 3800 down. That’s more down than up. Anytime you see a pattern in the days trading like that you take notice and you do some research. Why was this the case? Why did they sell? Is there a reason for it to continue? Answer all the questions that you can and move on from there. To sell because there was a drop in certain stocks like there was today is nothing more than panic!!! The first thing you do if you are invested in a particular thing for a particular reason is ask if anything has changed? Has the reason changed that you are invested in this area for? Profit taking is often a precautionary thing. It doesn’t mean something is wrong. It means that somebody is worried that it might get that way. It never hurts to book some profit but it hurts to sell because you are panicked. In this case I can’t see that anything tangible has changed. So what do you do? You raise your level of vigilance and keep a very close eye on your charts. Closer than you normally would. They will either get better or they will get worse and if they breach key technical levels and get worse you sell. Check you emotions at the door! Think with your chart not your heart! Emotions will get you killed in this business. I’ll tell you more about what I think about today after we go through our charts……

The days trading left us with the following results: Our TSP allotment fell -0.97%. That may sound bad but at one time it was much worse… For comparison, the Dow was up +0.79%, the Nasdaq was flat at -0.01%, and the S&P 500 added +0.48%. Obviously, it wasn’t a good day for us but you know what? Sometimes you just have to have a little faith! I choose to praise God for what He has done for us and that we are still solidly in the green!

The days action left us with the following signals: C-Buy, S-Neutral, I-Neutral, F-Neutral. We are currently invested at 100/S. Our allocation is now +8.54% on the year not including the days results. 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  [email protected].