08/20/14

Good Evening,

The market pulled back early, consolidated, then rebounded and finished the day with small gains. The strength of the market is impressive. I was fully expecting a day or two of consolidation, but this market just refuses to fold. My speculation is that traders are loading up ahead of the FED meeting in Jackson Hole, Wyoming, which has been friendly to the market for the past seven years. The result for us was another small gain in TSP and a small loss in AMP. Today makes three successive days of decline for traditional safe havens, which hasn’t happened in a while. Does this define a change in the overall character of the market? Probably not, but we definitely need to watch our charts closely through this Jackson Hole meeting. My plan is not to make any changes unless the market swings one way or the other enough to generate new signals. If that happens we will make the necessary adjustments to blend with the trend. 

Wall Street Climbs Following Fed Minutes

 

The day’s action left us with the following signals: C-Buy, S-Buy, I-Neutral, F-Buy. We are currently invested at 40/C, 60/S. Our allocation is now -4.28% on the year not including the day’s gains. Here are the latest posted results:
08/19/14
Fund G Fund F Fund C Fund S Fund I Fund
Price 14.4996 16.508 25.9458 35.4387 26.2095
$ Change 0.0010 -0.0131 0.1343 0.1401 0.0945
% Change day +0.01% -0.08% +0.52% +0.40% +0.36%
% Change week +0.03% -0.28% +1.38% +1.64% +1.06%
% Change month +0.12% +0.67% +2.80% +3.64% -0.47%
% Change year +1.49% +4.87% +8.67% +5.25% +2.52%
  L INC L 2020 L 2030 L 2040 L 2050
Price 17.2802 22.7223 24.6174 26.1738 14.8714
$ Change 0.0161 0.0528 0.0728 0.0886 0.0568
% Change day +0.09% +0.23% +0.30% +0.34% +0.38%
% Change week +0.27% +0.68% +0.88% +1.01% +1.15%
% Change month +0.55% +1.09% +1.39% +1.62% +1.76%
% Change year +2.76% +4.25% +4.94% +5.39% +5.75%
It’s not hard to tell from looking at the chart that stocks are up and bonds are down!
Here’s what the C Fund looked like today. Chart courtesy of Sockcharts.com.
The C Fund closed right at resistance today. It also finished out of its upward trading channel for the second consecutive day which will force me to draw a new (steeper) trading channel. The current level of ascent is probably not sustainable. If price continues to climb, I would fully expect the level of ascent to taper off. Of concern is the parabolic nature of this rise. Charts that show a parabolic rate of gain usually do not resolve well. One has only to look at a few volatile penny stock charts for a good example. They almost always end in a rapid drop. Not that I’m saying that will happen here, but the pattern bears watching. The longer it continues, the harder it will fall when it does pull back. All our other indicators are in great shape. Worth noting is that the PMO is now showing some separation from its 20 EMA which is bullish. Volume was kind of light, but that is to be expected in August and is nothing to be concerned about.
0820
God continues to bless our hand as our TSP allocation is putting together a really nice month. All that we need to do now is monitor our charts and get out with some gains! That’s all for tonight. Have a nice evening. God bless,
Scott8-)

 

 



Written By

Scott Grimes

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