Good Evening,
Where is the bounce??? Where are the perma bulls now??? Not very happy I would think. I told you that sooner or later prudent money management would win the day. Today’s sell off was an example. It is true that things might pick up a full head of steam tomorrow, but today is a good example of how it is getting harder for the bulls to get the job done without all the cheap FED money to prop them up. Both TSP and AMP made the thinnest of gains today. However, it’s not how much they made, but rather what they didn’t lose that’s important on a day when the S&P was off -0.97%. Our charts were clear this time without so much FED money to fog up the picture, allowing us to be in the right place for a change. May God be praised! Now let’s pray that this will be a good correction. The bigger it is, the more money we will be able to make when it comes to an end. I realize there were some headlines about Russia out there today, but this market was primed for a correction and the headlines are only an excuse. RevShark wrote it well in his afternoon comments. He said exactly what I have been saying and said it well, so I will post it here for your review.
James DePorre (RevShark)
08/05/14 4:02 PM: Afternoon Comments
“The possibility that Russia may invade Ukraine received the blame for the poor market action today but that is just a convenient explanation for the media to use as a headline. The market has been struggling recently for a variety of fundamental and technical reasons. In large part we simply were due for some corrective action and now that it is playing out the folks who write about the market have to develop some simple logic to explain it.Markets go through cycles and the bears are finally having a turn. The fact that they have been denied for so long makes it feel even weaker but it is not only normal action but quite healthy. The market has gone far too long without the natural ebb and flow that we used to see before the Fed started supplying endless cheap capital.What is really happening in this market is that we are shifting back to more normal action as the Fed slowly withdraws its support. It may be painful in the near term but eventually the market will trade with normal emotions again as the manipulation of the central banks recedes.The big question is how long will it take for this play out? I have no idea but the current price action is a clear sign to be defensive. The key isn’t to time the exact turns but to embrace the trends when they occur. Right now the trend is down and the bears have control. That is really all you need to know.Of course there are always a few stocks that are acting well and the potential for counter-trend moves is very high so you don’t want to be dogmatically bearish. Just respect the fact that the market is generally acting poorly and that you need to protect capital more aggressively.”
Market jitters return. Dow drops 140 points
| 08/04/14 | |||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 14.4854 | 16.4428 | 25.3467 | 34.351 | 26.0576 |
| $ Change | 0.0028 | 0.0119 | 0.1810 | 0.2382 | -0.0800 |
| % Change day | +0.02% | +0.07% | +0.72% | +0.70% | -0.31% |
| % Change week | +0.02% | +0.07% | +0.72% | +0.70% | -0.31% |
| % Change month | +0.03% | +0.27% | +0.43% | +0.46% | -1.05% |
| % Change year | +1.39% | +4.45% | +6.16% | +2.02% | +1.93% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 17.1937 | 22.4815 | 24.286 | 25.7663 | 14.616 |
| $ Change | 0.0190 | 0.0501 | 0.0691 | 0.0852 | 0.0524 |
| % Change day | +0.11% | +0.22% | +0.29% | +0.33% | +0.36% |
| % Change week | +0.11% | +0.22% | +0.29% | +0.33% | +0.36% |
| % Change month | +0.05% | +0.02% | +0.03% | +0.03% | +0.01% |
| % Change year | +2.24% | +3.15% | +3.52% | +3.75% | +3.93% |
“Volume was very high today, but it did contract significantly from the levels of Thursday and Friday. Price has been turned back from overhead resistance. The next area of support is about 190.00 on the rising trend line. Note that the line is only touching one bottom, but we have approximated the angle based upon the weekly chart.”
“Conclusion: Our inner bear feels that it deserves a better correction than what we have so far, and perhaps it will happen this time. If the rising trend line can stop the decline at 190, no serious technical damage will have been done, but if it drops below that level, it is likely that a much more serious decline will follow.”
