Good Evening,
Stocks started off in the cellar, but pulled back for the most part to the break even by the close. The action in small caps again was poor and the Nasdaq finished in the red with terrible breadth. Our decision to reduce our allocation in the S Fund looks to be a good one. It would have been nice to be able to move our funds before the market opened, but as you well know, we had to wait until the market closed before our funds could move due to the trading restrictions in TSP. Occasionally that can help you. However, most of the time it hurts. The rest of the week should be interesting with the FED meeting concluding Wednesday and the big jobs report on Friday. It is my expectation that the jobs report will be good but how the market reacts to that is a crap shoot. The last time the jobs report was good the market sold off for a day or two on the assumption that the FED would increase interest rates sooner. Another land mine that exists this week is the statement that will be made after the FED meeting. If the word increase is mentioned or inferred, even for next year, the market will sell off in a big way. I will guarantee that. Also, don’t forget the situations in the Ukraine and Gaza Strip. European leaders today agreed along with the US to greater sanctions against Russia that will target specific areas of their economy. The latest news on Gaza has the cease fire failing and Israel renewing its offensive. To top that off, Benjamin Netanyahu, in a statement released today, told his people to prepare to be in this for the long haul. None of this is market friendly news! With that in mind, we must keep a good eye on our charts in Thrift. We cannot afford to short the market and get whipsawed again if it sells off so we must stay invested and be vigilant. Of course, if it continues higher, we are in the right place. The day will come soon when this market will be back to normal and by normal I mean pre-2009. It is getting more like that every day. While the market continues to creep back from this current downturn, it is not very healthy and is a far cry from the quick V shaped recoveries that we have become accustomed to the past four years. One needs only to look at the chart for the Russell 2000 to see the real story behind this market. It is a mere day or two from a solid sell signal and is a whole lot weaker than the charts for the major indices. With all that in mind, since we don’t have the trade restrictions in AMP that we have in TSP and also have better defensive options available, we went on the defensive in that program today. We are still able to make some money and remain on the defensive at the same time whereas it is either/or in thrift. I don’t mean to bore those that don’t have money invested the AMP program, but some of you do, so I like to give you an idea of what we’re doing there as well. Also, it does let those of you that are thinking of investing with us upon your retirement know how your funds will be handled.
It was another merger Monday on Wall Street. But that didn’t excite investors too much.
| 07/25/14 | Prior Prices | ||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 14.4763 | 16.4475 | 25.8534 | 34.9738 | 26.7041 |
| $ Change | 0.0009 | 0.0323 | -0.1254 | -0.2504 | -0.1265 |
| % Change day | +0.01% | +0.20% | -0.48% | -0.71% | -0.47% |
| % Change week | +0.04% | +0.11% | +0.01% | -0.24% | +0.43% |
| % Change month | +0.15% | +0.11% | +1.03% | -2.20% | -0.58% |
| % Change year | +1.33% | +4.48% | +8.29% | +3.87% | +4.46% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 17.2566 | 22.7174 | 24.6164 | 26.1714 | 14.8784 |
| $ Change | -0.0149 | -0.0577 | -0.0821 | -0.1025 | -0.0667 |
| % Change day | -0.09% | -0.25% | -0.33% | -0.39% | -0.45% |
| % Change week | +0.06% | +0.07% | +0.08% | +0.07% | +0.08% |
| % Change month | +0.15% | +0.09% | +0.02% | -0.05% | -0.09% |
| % Change year | +2.62% | +4.23% | +4.93% | +5.38% | +5.80% |
“Price bounced off of support in the rising trend channel, but based on the last three previous highs, I find that there is a short-term rising wedge. This is a bearish formation where the expectation is a break down out of the wedge. Volume was lower likely due to those waiting to find out more about the FOMC meeting. The PMO turned down below its EMA which is very bearish.”
“Conclusion: The market environment is looking bearish, from indicators to the new bearish ascending price wedge. The most positive outcome I can see is a price move to the top of the rising wedge or rising trend channel.”
