Good Evening, The fundamentals and the charts do not agree at all! The charts say sell and the fundamentals say bounce! If I’m forced to choose then I choose the charts. Basically it boils down to this. Investors have become increasingly concerned that the Federal Reserve is raising rates too fast. Also adding to the market pressure is the fact that treasury rates are moving up. As bond rates rise bonds become more attractive to income investors and attract money from the equity market. These two factors are combining to destabilize stocks. Earnings season gets underway in earnest next week and investors will be looking closely at the guidance that companies give in their reports. If they guide down based on China and increasing interest rates then we will experience more pain. If not then it will be rally on. The economy is still on solid footing but investors are concerned that Jerome Powell and company will slow it down and possibly even send it into are recession by raising rates too fast. On that point I agree. I have tried ardently to make it to next week without selling but there comes a time when you have to do what you have to do. Today the S Fund finally generated the dreaded sell signal. The fundamentals say the market is oversold in due for a bounce. So do we ignore the sell signal? I would love to but I’m not in the habit of gambling with retirement money. So I will be putting in an interfund transfer effective for tomorrows close of business. It other words it has to be put in before 12:00 PM EDT. The new allocation will be 100% G Fund. Please note that in the event that the market bounces I will cancel the transfer! If that takes place it will be day to day. So keep checking for new developments. I said it would be close and this is what I meant. Further note that in the event that sell tomorrow and the market bounces in the coming days or weeks we will promptly reenter the equity market. Any gains that we forgo as a result of selling tomorrow should be considered insurance money against further downside. There is no way we can completely rule out a bear market and that means we must play defense and protect our precious retirement money. Please check here to make sure there are no further changes. Also for those of you on Facebook, I will post what we are doing there. As usual, you will need to check here for the details. Stay vigilant!!!!! I Fully expect the market to rebound! Nonetheless, we must prepare for the worst and pray for the best! God is with us.
The days trading left us with the following results: Our TSP allotment dropped -1.87%. For comparison, the Dow fell -2.13%, the Nasdaq -1.25%, and the S&P 500 -2.06%. As Warren Buffet says “There is blood in the streets”. I might add that he also says that is good time to buy……..
The days action left us with the following signals: C-Neutral, S-Sell, I-Sell, F-Neutral. We are putting in an interfund transfer and will be invested at 100/G effective after the close of business tomorrow. Our allocation is now +2.22% on the year not including the days results. Here are the latest posted results:
| 10/10/18 | Prior Prices | ||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 15.8831 | 17.6849 | 39.765 | 49.9553 | 28.9171 |
| $ Change | 0.0013 | -0.0211 | -1.3530 | -1.5594 | -0.5319 |
| % Change day | +0.01% | -0.12% | -3.29% | -3.03% | -1.81% |
| % Change week | +0.04% | +0.04% | -3.44% | -3.92% | -3.02% |
| % Change month | +0.08% | -0.90% | -4.35% | -7.02% | -5.28% |
| % Change year | +2.20% | -2.37% | +5.73% | +3.07% | -6.28% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 19.9275 | 27.4071 | 31.2657 | 34.0147 | 19.6908 |
| $ Change | -0.1123 | -0.2365 | -0.5372 | -0.6999 | -0.4627 |
| % Change day | -0.56% | -0.86% | -1.69% | -2.02% | -2.30% |
| % Change week | -0.64% | -1.00% | -2.02% | -2.42% | -2.77% |
| % Change month | -1.00% | -1.55% | -3.08% | -3.69% | -4.22% |
| % Change year | +1.93% | +1.92% | +1.72% | +1.60% | +1.52% |
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