Good Evening,

We were greeted this morning with news that the Japanese economy is receding. That means they are now in a recession until their GDP again starts to expand. As Japan is one of the main players on the world economic stage, some selling was expected. While Asian markets sold off at a moderate pace, the selling in domestic markets was little more than a sigh. The media was talking about the S&P 500 closing near all time records. However, breadth was not good with the NYSE recording 1720 losers to only 1373 gainers. All in all the market drifted sideways exhibiting the type of action that we predicted we would see. Now, the million dollar question is whether it is consolidation or exhaustion? Either way, I still expect to see small gains in November and December after more of the same sluggish action. If I get anything more than that, I’ll thank God and gladly take it. The result of today’s action for us was a small loss in TSP and a small gain in AMP. AMP was able to record another gain due to its diversified allocation. That is one of the advantages of being invested on the street (outside of TSP). 

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S&P 500 ends at record high; mergers offset Japan recession

 

 

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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, but will be re-balancing our allocation to 50/C, 50/S at the earliest possible opportunity. Our allocation is now -1.14% on the year not including today’s results. Here are the latest posted results:

11/14/14
Fund	G Fund	F Fund	C Fund	S Fund	I Fund
Price	14.578	16.6587	26.8418	35.6505	24.886
$ Change	0.0009	0.0182	0.0100	0.0067	0.0074
% Change day	+0.01%	+0.11%	+0.04%	+0.02%	+0.03%
% Change week	+0.04%	+0.01%	+0.45%	+0.27%	+0.87%
% Change month	+0.08%	+0.09%	+1.23%	+0.51%	-0.98%
% Change year	+2.04%	+5.83%	+12.43%	+5.88%	-2.65%
	L INC	L 2020	L 2030	L 2040	L 2050
Price	17.3929	22.8392	24.7397	26.3014	14.925
$ Change	0.0030	0.0056	0.0071	0.0080	0.0047
% Change day	+0.02%	+0.02%	+0.03%	+0.03%	+0.03%
% Change week	+0.14%	+0.30%	+0.36%	+0.41%	+0.46%
% Change month	+0.18%	+0.27%	+0.32%	+0.36%	+0.37%
% Change year	+3.43%	+4.79%	+5.46%	+5.91%	+6.13%

Some money is starting to flow into the more secure larger cap stocks as traders seek to hedge their portfolios against more downside. As a result, the C Fund has recently been out performing the S Fund. Therefore, we are allocating a few more of our funds to the C Fund. Here’s what the C Fund looked like today. (All charts courtesy of Stockcharts.com)

Price is now trading sideways. Is this initiation or exhaustion? Only time will tell. We will keep our focus on support at the 2020 level. We would consider it bearish if that is broken. Also of note is the MAC D which continues to weaken and is now close to neutral territory. The C Fund is extended and could just be working off those conditions. But, I favor a short term pullback and will be watching the Williams %R for signs of ultra short term weakness.

Things are still going along with our plan. We will continue to try to get some gains out of the holiday season while watching our charts for any signs of weakness.
That’s all for tonight. May God continue to bless your trades! Have a nice evening.

God bless,

Scott