10/30/14

Good Evening,

Yesterday’s consolidation followed through into this morning, but it was short lived. GDP came in at 3.5% and Visa reported robust earnings that out-performed estimates. That was all the under-invested bulls needed to jump in and get a piece of the action. Truth be known, they were probably looking for the first sign of weakness to get in anyway. The talking heads are saying that things are getting over bought. However, we still have a little ways to go to reach resistance at September’s highs and positive seasonality has arrived. Things are getting a little extended and I fully expect there to be some rest periods between now and Christmas, but I think we’ll move higher until then. Of course, there’s a wild card in the elections. I’m not talking politics here, just stating a well know fact. When a particular party wins the market rallies and when they lose, things get kind of flat. Right now, there’s a lot of talk about that party winning the upcoming elections and a lot of that is probably getting priced in. If that fails to materialize, then the short-term out look may not be so good. We’ll see. Elections are one of those things we really can’t control. Either way, my expectations are for us to finish well into the holidays. Just maybe not as well if the elections don’t please Wall Street. All we can do is vote and see how it all effects our charts. As far as today’s action went, all three major indices were up with the Dow leading the way at +1.30% largely on the back of Visa. Both TSP and AMP finished the day with moderate gains.  

Wall St. up on GDP, earnings; fund year-end lifts winners

 

 

The day’s action left us with the following signals: C-Buy, S-Buy, I-Neutral, F-Neutral. We are currently invested at 30/C, 70/S. Our allocation is now -3.68% on the year not including the day’s gains. Here are the latest posted results:
10/29/14
Fund G Fund F Fund C Fund S Fund I Fund
Price 14.5639 16.6483 26.0447 34.7954 24.5646
$ Change 0.0010 -0.0299 -0.0339 -0.1352 -0.0396
% Change day +0.01% -0.18% -0.13% -0.39% -0.16%
% Change week +0.03% -0.18% +0.91% +1.44% +0.77%
% Change month +0.19% +0.99% +0.63% +2.13% -2.88%
% Change year +1.94% +5.76% +9.09% +3.34% -3.91%
  L INC L 2020 L 2030 L 2040 L 2050
Price 17.2926 22.5485 24.3425 25.8193 14.6205
$ Change -0.0072 -0.0225 -0.0321 -0.0403 -0.0253
% Change day -0.04% -0.10% -0.13% -0.16% -0.17%
% Change week +0.20% +0.49% +0.64% +0.74% +0.84%
% Change month +0.21% +0.07% +0.06% +0.08% -0.01%
% Change year +2.83% +3.45% +3.77% +3.97% +3.96%
Let’s take a look at the C Fund with my analysis and the SPY with analysis by Decision Point. (All Charts courtesy or Stockcharts.com)
This is a model of my charts that I use everyday. I have annotated it to direct you to important areas of the chart. Nothing has really changed. The C fund is behaving exactly the way the indicators predicted. It is a solid buy signal and that is the reason that we are invested in the Fund. The main area of emphasis now is to watch the chart as if rises to resistance in the 2020 area. Our plan is to book some partial profits when price rises to that area.

 

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Now here’s Decision Point. Remember that the SPY is an ETF (Exchange Traded Fund) that tracks the S&P 500. Carl Swenlin (who is, as far as I’m concerned, one of the fathers of Technical Analysis) uses it in lieu of the actual index as it gives him a little better feel for whats going on in the market. The analysis is actually by his daughter Erin Heim.
Price is heading to test all-time highs. The 20-EMA is about to cross above the 50-EMA which will trigger a Trend Model BUY signal. That should happen tomorrow barring a crash below the 50-EMA. Good news is that volume, although about average, has been rising since the end of the ‘pause’. The PMO has nearly passed the zero line which confirms what we are seeing as far as internal strength.
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Conclusion: The ultra-short-term and short-term indicators suggest there could be another pause or small decline, but the bigger picture is bullish as intermediate-term indicators continue to be very bullish. 
Nothing has changed. The market is progressing according to our analysis and as a result we are making money. God continues to bless our group. Give Him all the praise!! The only potential land mine at this time is the election. It is also possible that we could see a sell the news reaction even with a favorable (to Wall Street) outcome to the election. I feel any action there will be short lived. Nevertheless, my current charts look great and that’s all I can deal with for the present. That’s all for tonight. May God continue to bless your trades!
God bless,
 Scott8-)

 



Written By

Scott Grimes

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