Good Evening, The S&P 500 has now gone down eight days in a row and ten out of the last eleven. This market was in what seemed an endless sideways trading range. No longer, it’s heading down now. There are many theories as to why. The most popular is that new polls show that the election has grown tight. I don’t know for sure about that, but what I do know is that the market hates uncertainty. There is a good chance that it may view things differently after the election. So far all we have is a nice pullback, not even a correction. The fact of the matter is that pullbacks and corrections are healthy for a normal market. I know it’s hard to say so when you in the middle of one but that is a fact. Of course, all bear markets begin with a correction. That is a dip of 10% or more. Right now we are nowhere close to that. A bear market is a downturn of 20% or more. Enough said! Given the recent history of shallow pullbacks, the way that the computer algorithms have taken advantage of them, the fact that election years are normally friendly, and last but no least that fact that November and December seasonally speaking have been the strongest months for the market since they have been keeping records, it would be best to wait until after the election to make that decision to sell. I’m sure those high speed computer traders have all shorted the market and are frothing at the mouth to push it back up after the election at the cost of all those folks that took defensive measures and sold. Yes, I could be wrong, but it will be the first time in over five years. It is always best to stick with the established trend until it has clearly changed. Mind you, I don’t like buying and holding, but in this case it’s probably the best thing to do. Time will tell. We’ll discuss it again in a month or so….for now I’ll keep investing and keep praying!
The days trading left us with the following results and if you think they are a lot like the last eight days then you’d be correct! Our TSP allotment dropped another -0.47%. For comparison the Dow fell back -0.16%, the Nasdaq -0.92%, and the S&P 500 -0.44%. The last eleven days have been annoying. A lot like a dripping faucet! The Good news is that there is now only two more trading days until the election…..
S&P 500 losing streak runs to 8 days as Facebook weighs
The days action left us with the following signals. C-Neutral, S-Sell, I-Sell, F-Sell. As you can see the S Fund has moved to a sell signal and we are currently invested at 100/S. As I mentioned in my last blog regarding the Sell signal for the I Fund, we are putting a five day delay on making any transactions. In other words we will wait five days and recheck the chart. If it is still showing a sell signal then we will then sell. We will recheck this signal on November 17th. My research showed that this delay avoided over 90% of the whipsaw signals. In other words it avoided the chart heading back in the other direction and leaving us leaning the wrong way. It happened to us so many times over the past 5 years that we were forced to make an adjustment. What is it they say? The definition of insanity is doing the same thing and expected different results. I agree. That’s the reason we have a five day delay on all transactions!
Our allocation is now -3.65% on the year. Here are the latest posted results:
| 11/03/16 | Prior Prices | ||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 15.1352 | 17.8483 | 28.69 | 36.3272 | 24.0842 |
| $ Change | 0.0008 | -0.0106 | -0.1169 | -0.1683 | -0.0409 |
| % Change day | +0.01% | -0.06% | -0.41% | -0.46% | -0.17% |
| % Change week | +0.03% | +0.12% | -1.73% | -2.21% | -0.74% |
| % Change month | +0.02% | +0.04% | -1.71% | -2.61% | -0.75% |
| % Change year | +1.47% | +5.27% | +4.09% | +3.10% | -0.05% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 18.1506 | 23.7967 | 25.7525 | 27.3241 | 15.4502 |
| $ Change | -0.0123 | -0.0347 | -0.0562 | -0.0700 | -0.0450 |
| % Change day | -0.07% | -0.15% | -0.22% | -0.26% | -0.29% |
| % Change week | -0.27% | -0.62% | -0.93% | -1.10% | -1.26% |
| % Change month | -0.30% | -0.65% | -0.98% | -1.15% | -1.32% |
| % Change year | +2.12% | +2.53% | +2.75% | +2.83% | +2.82% |
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: The S fund generated an overall sell signal when the 5 EMA moved down through the 200 EMA with the PMO, MACD, and Wms%R already in negative configurations. I will recheck this signal in five trading days. If it remains the same we will exit this position.
I Fund:
F Fund:
We now have sell signals on 2 of our 3 equity based charts with 2 trading days to go before the election. That’s all for tonight! Have a nice evening and may God continue to bless your trades.
