Good Evening,
We got our bounce today. The major indices recouped about half of their losses from yesterday on large volume. Traders have been conditioned to buy pullbacks over the past five years and they’re not going to give up on that strategy until they are forced to do so by several failed bounces. Like I said yesterday and the day before, interest rates are low and there’s still a lot of cheap money to float the boat. Nobody knows for sure when the party is going to be over, but I wouldn’t bet against it just yet. We remain partially invested in TSP and AMP and will watch the charts to see if we need to pull back or let off on the reigns. Our theory has been that this pullback and subsequent bounce will play out with a rally just as the others have done so far this year. Don’t get me wrong, I’m not a perma-bull, but until the trend is broken, I have to believe that it will continue with improving seasonality and the still abundance of cheap money looking for a place to go…
Wall Street rallies but ends lower for week
The week’s action left us with the following signals: C-Neutral, S-Sell, I-Sell, F-Neutral. We are currently invested at 60/G, 40/C. Our allocation is now -6.08% on the year not including today’s gains. Here are the latest posted results:
| 09/25/14 | |||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 14.5323 | 16.4976 | 25.7919 | 34.2038 | 25.3979 |
| $ Change | 0.0009 | 0.0492 | -0.4236 | -0.5048 | -0.2836 |
| % Change day | +0.01% | +0.30% | -1.62% | -1.45% | -1.10% |
| % Change week | +0.04% | +0.41% | -2.19% | -3.05% | -2.32% |
| % Change month | +0.15% | -0.51% | -1.74% | -4.72% | -3.42% |
| % Change year | +1.72% | +4.80% | +8.03% | +1.58% | -0.65% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 17.2513 | 22.5315 | 24.3293 | 25.803 | 14.6257 |
| $ Change | -0.0471 | -0.1645 | -0.2290 | -0.2811 | -0.1808 |
| % Change day | -0.27% | -0.72% | -0.93% | -1.08% | -1.22% |
| % Change week | -0.42% | -1.19% | -1.55% | -1.81% | -2.06% |
| % Change month | -0.45% | -1.37% | -1.83% | -2.17% | -2.47% |
| % Change year | +2.58% | +3.38% | +3.71% | +3.90% | +4.00% |
Here’s what the C Fund looked like today. Chart courtesy of Stockcharts.com.
As you can see, the lower resistance that we annotated yesterday held with a bounce back up to 1982.85. While the ultra short term trend is down, the long term upward trend is still in place, which is the reason that we are still invested in this fund. Also encouraging is the fact the the Williams % R gave a short term buy signal. Very seldom does this indicator reverse without making it above -20. If the short term rally that it predicts comes to fruition, it should return price firmly back to the established upward ascending channel. The chart remains at neutral with two of its four indicators in a negative configuration. The PMO continues to drop. My expectation is that it will turn up in the neutral area at about zero, so expect some lower prices in the intermediate term. Overall, the chart falls right in line with our expectations of a strong rally close to (or in the beginning of) November.
My analysis may be a little drier than Erin’s, but it’s right on the money! We lost some ground this week to be sure, but our analysis has been spot on and it remains correct; we will be rewarded for our diligence. As I have said many times, God has been with our group throughout the years and has done some miraculous things. I believe in technical analysis as it has always been the best way to invest, but my faith is in God. I say again, don’t give up on the year. He will not let us down! Have a nice weekend and get outside and do something fun. There’s so many festivals and things to do this time of year and the weather, at least for a little while longer, is nearly perfect. As for me…I’ll be going to another show with the purple car. She managed to get one of only 30 awards at a show with over 300 cars last week so I am motivated to go again. I guess that if the Marine Corps and Bureau of Prisons taught me anything, it was how to keep equipment sparkling clean. LOL. People will ask me about keeping it so clean and I tell them “If it don’t shine it ain’t mine so why not show it”.
God bless,
Scott 
