08/11/14

Good Evening,

Today we had a follow through on the bounce that began Friday. I, for one, am not ready to embrace this short rally as the end of the correction for two reasons.

1. Today’s volume was low.

2. Most of the charts I looked at were repelled at over head resistance which is marked at the former lower resistance level that was breached during last weeks sell off. 

We are one bad news event in Ukraine from a full correction defined as a pullback of 10% or greater. The risk/reward factor is just too big right now to hang out in stocks. Our system says to stay defensive and that is what we will do. Our TSP allotment made only the slightest of gain today at around +.01%, but most of our goal there is not to slide back and in that we were successful. The AMP program continues to play defense extremely well posting another small gain of +.0936%. That is the difference that the greater variety of investments brings to us on the street. The AMP program has now gained +1.21% month to date and has posted gains on six out of seven trading days so far for an average gain of +.1728% per day. Now that’s the way to play defense! Why risk your portfolio in a volatile market when you can make steady gains like that? We’ll see if we can keep it up. As far as TSP goes, we will consider re-entering stocks should we get a solid buy signals. However, that is not the case at this time. 

Wall Street ends up for second day on hopes for Russia relief

 

 

 

 

 

Today’s trading left us with the following signals: C-Sell, S-Sell, I-Sell, and F-Buy. We are still invested at 25/G, 75/S. Our allocation is now -6.06% on the year. Here are the latest posted results:
08/11/14
Fund G Fund F Fund C Fund S Fund I Fund
Price 14.492 16.4785 25.3416 34.6323 25.7903
$ Change 0.0028 -0.0007 0.0747 0.2457 0.1534
% Change day +0.02% +0.00% +0.30% +0.71% +0.60%
% Change week +0.02% +0.00% +0.30% +0.71% +0.60%
% Change month +0.07% +0.49% +0.41% +1.28% -2.07%
% Change year +1.43% +4.68% +6.14% +2.86% +0.88%
  L INC L 2020 L 2030 L 2040 L 2050
Price 17.1968 22.4672 24.2672 25.747 14.6001
$ Change 0.0174 0.0544 0.0753 0.0927 0.0595
% Change day +0.10% +0.24% +0.31% +0.36% +0.41%
% Change week +0.10% +0.24% +0.31% +0.36% +0.41%
% Change month +0.07% -0.04% -0.05% -0.04% -0.10%
% Change year +2.26% +3.08% +3.44% +3.68% +3.82%
All the equity based charts that I looked at today are glaring one thing in common. They were all repelled at their 50 EMA, and I mean to the last chart. On top of that, they did so on less than average volume. Both of things things are warning signs that say tread lightly!  (All charts courtesy of stockcharts.com).
C Fund – As I noted above the C Fund  was solidly rejected as its 50 EMA. The 50 EMA had acted as lower resistance since April until it was breached early last week. While the decline has stopped for now, it is not a good sign that price was repelled at overhead resistance. This level must be quickly negotiated for this short rally to gain steam. Every day that price remains below this level makes it more likely that the correction will resume. If you look back at the decline in mid April you will see that resistance at the 50 EMA was penetrated with no problem as another V-shaped bounce occurred. This type of movement was a trade mark of the V-Shaped bounces that have occurred for the past several years. Today’s rejection is proof positive that things are at least a little different this time. On the brighter side, the PMO did start to slow its descent today, which could be the start of a bottom. The MAC- D also improved and the Williams %R is now giving a short-term buy signal. However, with three out of four indicators down, the chart is a strong sell. The C Fund has a lot of damage to repair before it can be trusted again, as do the S and I Funds.
0811
This market is just not out of the woods yet. It must make a lot of progress through strong headwinds before it can re-establish an upward trend. We will continue to play it safe for now. May God continue to guide our hand! Have a nice evening.
                                                                                                                                                                                                                                                                                                                                                         God bless,
Scott8-)

 



Written By

Scott Grimes

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