10/02/18

Good Evening, For the second day in a row, small-cap stocks were aggressively sold while the Dow hit new highs. Since the close on Friday, the Dow is up about 1.2% while the Russell 2000 ETF (IWM) is down 2.36%. This is rotation plain and simple. The major funds have decided to buy trade sensitive large cap stocks and are dumping small caps to do it. This type of rotation is not uncommon and is usually rectified in short order. If anything it will create good entry points into fundamentally sound small caps which investors will pursue aggressively in just a few weeks. A major index may out perform the other indices in that manner for a while but eventually they are all going to move in the same direction. In other words the other indices will eventually catch up. The same thing holds true on the way down too. So if another index is tanking you better keep a close eye on the one your in as well because it probably won’t be long until it follows suit. I this case you must be patient and wait for your turn to come.

The days trading left us with the following results: Our TSP allotment dropped -0.70%. For comparison, the Dow added +0.46%, the Nasdaq fell -0.47%, and the S&P 500 slipped -0.04%.

 

Dow closes at record but Facebook drags on S&P, Nasdaq

The days action left us with the following signals: C-Neutral, S-Neutral, I-Neutral, F-Neutral. We are currently invested at 100/S. Our allocation is now +8.18% on the year. Here are the latest posted results.

 

10/02/18 Prior Prices
Fund G Fund F Fund C Fund S Fund I Fund
Price 15.8727 17.8507 41.7095 52.8709 30.3343
$ Change 0.0013 0.0214 -0.0154 -0.3904 -0.1427
% Change day +0.01% +0.12% -0.04% -0.73% -0.47%
% Change week +0.02% +0.02% +0.33% -1.59% -0.64%
% Change month +0.02% +0.02% +0.33% -1.59% -0.64%
% Change year +2.14% -1.46% +10.90% +9.09% -1.69%
  L INC L 2020 L 2030 L 2040 L 2050
Price 20.1228 27.8207 32.2114 35.2515 20.5104
$ Change -0.0079 -0.0190 -0.0493 -0.0668 -0.0461
% Change day -0.04% -0.07% -0.15% -0.19% -0.22%
% Change week -0.03% -0.06% -0.15% -0.19% -0.24%
% Change month -0.03% -0.06% -0.15% -0.19% -0.24%
% Change year +2.93% +3.46% +4.80% +5.30% +5.74%

 

 

 Now lets take a look at the charts. All signals are annotated with green circles. If you click on the charts they will become larger.
C Fund:
S Fund:
I Fund:
F Fund: The F Fund generated an overall Neutral signal today when the MACD moved into a positive configuration. or more negative signals or the 5 EMA below the 50 EMA or 200 EMA  or an SCTR below 40 generate a neutral signal. Any three indicators negative accompanied by both or either the 5 EMA below the 50 EMA or 200 EMA or an SCTR below 40 generate a sell signal. A buy signal is generated then the 5 EMA is above the 50 EMA and the 200 EMA, One or less indicators are negative, and the SCTR is higher than 40.

I’ll be the first to admit that we are definitely feeling some pain in the S Fund.  However, as I mentioned in a recent post you can move to late in the game and cost yourself money on both ends. I have little doubt that the S Fund will our perform from late October through December but I definitely didn’t anticipated small caps selling off this hard due to a trade agreement with Canada. That’s my mistake and I’ll claim it and move on. Experience has taught me that it is better to hold in a situation like this rather than make a short term mistake that can cost dearly. Perhaps I’m wrong and the trade situation will keep large caps most notably the Dow Jones Industrial and the S&P 500 on top until the end of the year. If it happens then I’ll be surprised. We’ll have our day!! That’s all for tonight. Have a nice evening and may God continue to bless your trades.

God bless, Scott 8-)

 
 ***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. 

 

 

 

 



Written By

Scott Grimes

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