Good Evening, A lightening up of the downward pressure on bonds and fiscal stimulus by China and Germany enticed investors back into equities on Monday. Stocks had recovered most of their losses from last Wednesday’s sell off. That is until today. This back and forth behavior has been the norm recently as stocks respond to every news item concerning the world economy in a dramatic fashion. That is especially so where news of the trade negotiations between China and the US are concerned. Expect more movement up or down (depending on the nature of the news) when the minutes from the last Fed meeting are announced on Wednesday and when Fed Chairman Jerome Powell speaks at Jackson Hole Wyoming on Friday. The economic symposium is often used as a platform for the Fed Chairman to comment on the future direction of Fed policy. You can be certain that investors will be hanging on his every word. Also don’t be surprised if US and Chinese officials make more comments on their upcoming meeting. All these things and more can induce this market to move dramatically in one direction or the other. That movement is what we normally refer to as volatility! So what do I think about all this? It’s pretty simple. I don’t feel like the bulls or the bears have a distinct advantage at this point. There is definitely money to be made, but the question is can you keep it? Last Wednesday’s sell off makes a good case for why you cannot. Here’s my bottom line. The majority of my indicators are showing that there is a higher level of risk in the current market that I am comfortable with. I believe the world economy and how governments around the world including the US respond to it are the issues that determine how volatile this market will be and in which direction it will go. However, there is one issue that is driving that debate and all roads lead to it…. It is the trade war between China and the US. There is no doubt that the trade war is having an effect on the world economy. So all other issues are merely off shoots from it. It is and will continue to be the driving force for this market volatility. I firmly believe it is the reason that my indicators continue to show a high level of risk. All that said, my plan is to stay invested in the F Fund as long as bond yields support the trade or to move to the G Fund in the event that they do not until there is a tangible trade agreement between the US and China…. As usual I’ll watch my charts and listen to my God. Give Him all the praise!
The days trading left us with the following results: our TSP allotment posted a gain of +0.27%. For comparison, the Dow dropped -0.66%, the Nasdaq -0.68%, and the S&P 500 -0.79%. Praise God for giving us a day in the green!
The days action left us with the following signals: C-Sell, S-Sell, I-Sell, F-Buy. We are currently invested at 100/F. Our allocation is now +8.36% on the year not including the days results. Here are the latest posted results:
| 08/19/19 | Prior Prices | ||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 16.2444 | 19.6764 | 42.4739 | 51.3932 | 29.1612 |
| $ Change | 0.0029 | -0.0594 | 0.5102 | 0.4646 | 0.2743 |
| % Change day | +0.02% | -0.30% | +1.22% | +0.91% | +0.95% |
| % Change week | +0.02% | -0.30% | +1.22% | +0.91% | +0.95% |
| % Change month | +0.11% | +1.99% | -1.74% | -3.76% | -2.56% |
| % Change year | +1.58% | +8.45% | +18.14% | +16.86% | +9.16% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 20.6005 | 28.3652 | 32.5819 | 35.5119 | 20.572 |
| $ Change | 0.0462 | 0.0811 | 0.2064 | 0.2667 | 0.1754 |
| % Change day | +0.22% | +0.29% | +0.64% | +0.76% | +0.86% |
| % Change week | +0.22% | +0.29% | +0.64% | +0.76% | +0.86% |
| % Change month | -0.27% | -0.40% | -1.20% | -1.48% | -1.75% |
| % Change year | +4.62% | +5.86% | +9.94% | +11.52% | +12.85% |
