Good Evening,
It was a flat Friday that was the end to a flat week. As a result, TSP and AMP had a flat day and a flat week. All in all, the market is just consolidating under pressure from overhead resistance. One bright spot today was that retail sales were up in the month of October. The low gas prices are acting as a sort of mini stimulus that should carry through the holidays. The positive news and conditions are just enough to keep the market moving sideways or up, even though it could really use a rest.
My thoughts written earlier were that the market will manage small gains in November and December, after a lot of action just like this. While they are accurate, they are just thoughts. Albeit, my thoughts were at least based on my charts. As far as timing the market goes, there has not been anyone who has been able to consistently predict market turns over the years. When you fully appreciate how hard it is to time the market, you get smart and find other ways to deal with it. You can’t make an accurate prediction, so you find another way to deal with it. You find a way to determine when the market conditions are shifting. This can be considered a type of market timing, but it is not the same thing as making a prediction. We react to facts rather than anticipate events. As reactive traders, we make our moves based on cold hard facts rather than predictions. We take emotions out of it and deal with measurable data that we derive from our charts. (Here he goes again) Emotions will get you into a train wreck every time!
Wall St posts gains for fourth week; ends flat for day
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 -1.16% on the year, not including today’s results. Here are the latest posted results:
| 11/13/14 | |||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 14.5771 | 16.6405 | 26.8318 | 35.6438 | 24.8786 |
| $ Change | 0.0008 | 0.0083 | 0.0162 | -0.1862 | 0.0602 |
| % Change day | +0.01% | +0.05% | +0.06% | -0.52% | +0.24% |
| % Change week | +0.04% | -0.10% | +0.41% | +0.25% | +0.84% |
| % Change month | +0.08% | -0.02% | +1.19% | +0.49% | -1.01% |
| % Change year | +2.03% | +5.71% | +12.38% | +5.86% | -2.68% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 17.3899 | 22.8336 | 24.7326 | 26.2934 | 14.9203 |
| $ Change | 0.0019 | 0.0035 | 0.0018 | -0.0014 | -0.0008 |
| % Change day | +0.01% | +0.02% | +0.01% | -0.01% | -0.01% |
| % Change week | +0.12% | +0.27% | +0.34% | +0.38% | +0.43% |
| % Change month | +0.16% | +0.24% | +0.29% | +0.33% | +0.34% |
| % Change year | +3.41% | +4.76% | +5.43% | +5.88% | +6.09% |
Let’s take a look at the SPY with the Decision Point crew. (All charts courtesy of Stockcharts.com)
Yesterday, price topped right on the rising trend line, but hasn’t begun to pullback yet. The PMO is rising but is starting curl, just like price.
Since we are at the end of the week, we will review some of the weekly charts. The weekly chart for the SPY shows us that in actuality, price could rise a bit more before hitting overhead resistance. But, we saw pullbacks occur throughout 2013 without price reaching the top of the rising trend channel.
Conclusion: Bearish indicators in all time frames imply the market is very ripe for a pullback or correction. Now that price has hit resistance and backed down slightly, I would expect next week we will finally see that pullback or the beginning of another sizable correction.
That is one possible conclusion. You already know what I think. If we indeed have a correction, I still think we will end the holidays with a slight gain. We’ll just keep praying and watching the charts. That’s all for tonight. Have a great weekend and try to stay warm.
God bless,
Scott
