Good Evening,
Small Caps out performed again today. This could be the start of the new rally. There’s no way to tell for sure this early, but I’m cautiously optimistic! At the least, it looks like small caps may be consolidating as we have been discussing here. They led the way down and are likely to lead the way up so we are watching them intently…. Of course, the TSP S Fund is a blend that includes a large percentage of small caps. Here are two charts to look at. The first is the Spyder Russell 2000 ETF and the second is the VXF better known to you as the S Fund. (All Charts Courtesy of StockCharts.com)
I have annotated the charts so you can tell what’s going on. The SPDR Russell 2000 is a blend of small caps.
Here’s the S Fund…..I’m sure all you 100 Ser’s are thrilled. All I can say is don’t always count on such good fortune. In a bear market, the S Fund can go down like it did last week for a long time. Swim at your own risk and I recommend swimming when the water is calm…… (Translate- Only when you have a solid buy signal)
Bottom line: These charts may be in first stages of bottoming!
Both TSP and AMP were steady today as both are pretty well in cash- which is a safe place to watch all this volatility…
News for the day:
The day’s wild 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 -5.74% on the year not including today’s results.
| 10/15/14 | |||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 14.5506 | 16.7924 | 24.4618 | 32.443 | 23.6592 |
| $ Change | 0.0009 | 0.0775 | -0.1987 | 0.1353 | -0.2791 |
| % Change day | +0.01% | +0.46% | -0.81% | +0.42% | -1.17% |
| % Change week | +0.03% | +0.85% | -2.28% | +0.08% | -0.72% |
| % Change month | +0.10% | +1.86% | -5.49% | -4.77% | -6.46% |
| % Change year | +1.85% | +6.68% | +2.46% | -3.65% | -7.45% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 17.0906 | 21.906 | 23.4528 | 24.7289 | 13.927 |
| $ Change | -0.0186 | -0.0741 | -0.0988 | -0.1147 | -0.0757 |
| % Change day | -0.11% | -0.34% | -0.42% | -0.46% | -0.54% |
| % Change week | -0.23% | -0.67% | -0.85% | -0.96% | -1.10% |
| % Change month | -0.96% | -2.78% | -3.60% | -4.15% | -4.75% |
| % Change year | +1.63% | +0.51% | -0.03% | -0.42% | -0.97% |
OK, I guess I have to address it. One of the FED members (James Bullard, St Louis FED president) who, I might add, isn’t even a voting member and won’t be until 2015, stated that the FED should consider delaying the END of quantitative easing or possibly even re-expand it. Is he kidding? FED FED go away and come back on another day. We finally have a market where we can make some money. Didn’t he get the memo? What goes up must come down and the farther it has to go the faster it will fall. Thank you FED, we appreciate what you did, now go away. Seriously, Janet Yellen, made the statement more than once that any decision on QE would probably be tied to the job market. And what did we have today? A jobless claim report that was better than any report since 2000. Yes, that’s the year 2000, as in 14 years ago. This market bounced because they think the FED is going to print more money? Are they delusional? The FED wants nothing more than to get out of the money printing business. I’ll even go one further, after today’s reports I wouldn’t be surprised to hear a FED member or two talk about increasing interest rates. I don’t believe they’ll have the votes to do it as long as the rest of the world economy is tanking, but mention it they will and if you think bonds are so secure just wait for that news clip…….. Anyway, my bet is no additional stimulus, but the interest rates won’t be increased until the world economy improves.
So where does all this volatility leave us? The same place we were last night. We’re staying in cash, waiting for the bottom, then watching our charts for buy signals. God has been good to us so be sure and give Him all the praise! May he continue to bless our trades. Have a nice evening.
God bless,
Scott
