Good Evening, The market was up against trade headwinds once again today as U.S. and Chinese tariffs on 50 billion in goods went into effect. While it was possible to make money on the street with good stock picking (I thank God for that) it was not possible to make money in wide based stock index funds today. There are four factors effecting the market  on any given day right now. Here they are: #1. President Trumps political difficulty. It’s difficult to govern when your constantly involved in some type of political drama and the heat really seems to be turned up on President Trump these days. Like him or not the Tax decreases and deregulation that his administration has put in place are market movers. Any threat to those policies has a negative effect on the market. One more thing I will mention concerning this subject. Historically,it has been a bad trade to sell on political turmoil. Just check out Watergate, the Iran Contra Affair and the Bill Clinton impeachment and you’ll find out that traders that sold then lost on all three occasions.  #2 Trade. Trade with China the worlds second largest economy is of particular importance and Mexico, Canada, and Europe to a lesser extent. Although recent gains in the NAFTA talks with Mexico have given the market a boost. In short, improvement in trade is a market positive and deterioration in trade is a market negative. #3 The Fed with particular emphasis on anything Fed Chairman Jerome Powell has to say. The Fed is on a tight rope. Too many interest rate increases are a market negative. Not enough increases to control inflation are a market negative. The FOMC has to get it just right. Their policies must be Goldilocks warm. Not too hot and not too cold. #4 The Mid Term Elections. Before you say it. I have no political agenda. My king is Jesus. I only call it like I see it or in other words I call it like it effects the market. Period!! In this case the Election of Democrats in mid term contests are seen as a threat to the current pro business administration. I don’t care how you feel about this issue one way or the other but the Election of left wingers is going to hurt your market returns. Once again, don’t shoot the messenger! I am not nor will I ever take sides on this blog!!! I write to a lot of fine Americans that belong to both parties. After all, isn’t that what we are? Americans?? So at least when it comes to money can’t we all get along? My goal here is to help both Republicans and Democrats break free of financial bondage!!!!! That’s it folks. Watch these issues and you’ll have a good grip on what’s going on in the market. There’s one more important thing that you all need to know! If trade is poor small caps will out-perform and the S Fund will be the place to be. If trade is good large caps will out-perform and you’ll probably want to allocate some money to the C Fund. The same goes for the dollar. It the dollar strengthens it will favor small caps. If it weakens it will favor large caps. There you go. You now have everything you need to know to navigate the market moving forward…… Of course you should never ever neglect your charts. They are your road map.

The days trading left us with the following results: Our TSP allotment fell back -0.30%. For comparison, the Dow dropped -0.30%, the Nasdaq -0.13%, and the S&P 500 -0.17%.

The days action left us with the following signals: C-Neutral, S-Buy, I-Sell, F-Buy. We are currently invested at 100/S. Our allocation is now +10.20% on the year. 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  KyFan1@aol.com.