Good Evening,
The market made a nice bounce after the FED minutes were released as investors cheered its dovish tone. Now the question is if the bounce signaled an end to the current down trend or will those that have taken long positions be punished. As we have all lamented, it has been anybody that has been defensive and shorted the market that has been punished up to this point. However, one really has to question the commitment of the dip buyers after a third failed bounce. The first time that there has been three failed bounces this year! We’ll watch the charts for any change in the character of this market, but right now the intermediate trend is down until proven otherwise. TSP held steady in the G Fund today and AMP posted a moderate gain after maintaining its position during yesterday’s sell off. We are positioned well to take advantage of a new rally when and if it occurs.
Stocks Rally Most in 2014 as Fed Bets Spur Rebound
The day’s action left us with the following signals: C-Sell, S-Sell, I-Sell, F-Buy. We are currently invested at 100/G. Our allocation is now -5.79% on the year not including today’s results.
| 10/07/14 | |||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 14.543 | 16.6121 | 25.4008 | 33.3197 | 24.4967 |
| $ Change | 0.0009 | 0.0494 | -0.3896 | -0.5443 | -0.2729 |
| % Change day | +0.01% | +0.30% | -1.51% | -1.61% | -1.10% |
| % Change week | +0.03% | +0.46% | -1.66% | -2.12% | -0.25% |
| % Change month | +0.04% | +0.77% | -1.86% | -2.20% | -3.15% |
| % Change year | +1.79% | +5.53% | +6.39% | -1.04% | -4.18% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 17.1925 | 22.2811 | 23.974 | 25.3634 | 14.3369 |
| $ Change | -0.0451 | -0.1568 | -0.2196 | -0.2703 | -0.1736 |
| % Change day | -0.26% | -0.70% | -0.91% | -1.05% | -1.20% |
| % Change week | -0.23% | -0.64% | -0.85% | -1.00% | -1.13% |
| % Change month | -0.37% | -1.12% | -1.46% | -1.69% | -1.95% |
| % Change year | +2.24% | +2.23% | +2.19% | +2.13% | +1.94% |
The C Fund made a monster gain today on above average volume as a lot of traders returned to the table after the dovish FED minutes. Upper resistance was broken, so we’ll be watching to see if that holds. That will go a long way toward telling us if the character of the current market is about to change. The PMO turned up slightly but has a lot of work to do before it will be able to come near a positive crossover of its 20 EMA. The Williams %R broke ultra short term resistance but is already up against new resistance at -50. We’ll need a whole lot more than today’s rally before we can trust this chart and it’s the best of our TSP Funds at this time. Buy this Fund now and you are just bottom fishing. You might get lucky and you might be catching a falling knife. It’s just too early to tell.
I’d love to see some more downside before this thing turns up. That would shake out some of the less committed bulls who would help fuel the rally back up. For now, we’ll continue to watch for the next entry point. It hasn’t come yet. At this time, all we have is a nice bounce and that doesn’t make a trend. That’s all for tonight. May God continue to bless your trades. Have a nice evening!
God bless,
Scott
