Good Evening, The market moved lower again today with the S&P 500 surpassing it’s previous low for the year set in February posting it’s lowest close since October 2017. We’ve already been over the fundamental reasons for this decline. Uncertainty based on Trade with China, the Fed setting interest rates, an inverted yield curve predicting a recession, brexit and related instability in the British Government, politics in the US with the Democrats taking control of the house of representatives and the pending corporate investigations they are calling for, the dropping price of oil, and a slowing world economy. So, did I leave anything out?? Uncertainty is the key word. The market hates it and we have it by the basket fulls. My only regret in all this is that I ever listened to all the fundamental arguments about how this bull market would be extended by a myriad of so called good economic news. How did this happen to us? How did we get sucked in to this? It’s simple. After the financial crisis of 2008/2009 the Fed started pumping money into the economy through the purchase of treasury bonds and by moving interest rates to historic lows. During that time the market became addicted to this cheap money just like it was heroin and I might add with the same effect as heroin. The market soared as the cheap money fueled the purchase of stocks. During this long run (which I say officially ended with this bear market) the market went without a decline of over five percent. It moved straight up on record low volatility while experiencing again and again the phenomenon of V shaped recoveries which up to that time were as rare as a Duck Billed Platypus. By the matter of fact 2017 set a record for the lowest volatility ever recorded. Fast forward to today when the Fed is unwinding the quantitative easing program resulting in the market experiencing withdrawal symptoms as it loses it’s supply of heroin err… cheap money. Anytime there’s an addiction at some point there will be a price to pay and this is the price of the markets addiction to cheap cash. The lesson to be learned in all this is that the only thing that really matters is the price action!!! Want to know whats going on? Then look at the price. In technical analysis we often say that a technician can do his or her job without even looking at a companies fundamentals or watching the news. News is often referred to as noise and it is considered mostly a waste of time to pay attention to either it or the fundamentals. You know what? They’re mostly right. Had we not followed a market based on fundamentals that were fueled by an addiction to cheap money we would be up eight or nine percent instead of down three!!! Lesson learned! It’s the price action that counts. News and fundamentals are just noise! They are a distraction. Pay attention to what counts. Watch you charts and pay attention to the price!!!!!
The days selling left us with the following results: Our TSP allotment was steady in the G Fund. For comparison, the Dow fell a whopping -2.11%, the Nasdaq -2.27%, and the S&P 500 -2.08%. There was blood in the streets. Praise God for leading us to the G Fund!
The days 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 -3.96% on the year not including the days results. Here are the latest posted results:
| 12/14/18 | Prior Prices | ||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 15.97 | 17.9803 | 37.2605 | 45.7689 | 27.1931 |
| $ Change | 0.0013 | 0.0216 | -0.7195 | -0.6512 | -0.3217 |
| % Change day | +0.01% | +0.12% | -1.89% | -1.40% | -1.17% |
| % Change week | +0.06% | +0.06% | -1.22% | -2.33% | -0.33% |
| % Change month | +0.12% | +0.92% | -5.72% | -7.06% | -3.11% |
| % Change year | +2.76% | -0.74% | -0.93% | -5.57% | -11.87% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 19.7737 | 26.9953 | 30.1434 | 32.5105 | 18.6756 |
| $ Change | -0.0611 | -0.1292 | -0.2894 | -0.3732 | -0.2445 |
| % Change day | -0.31% | -0.48% | -0.95% | -1.13% | -1.29% |
| % Change week | -0.17% | -0.30% | -0.65% | -0.79% | -0.92% |
| % Change month | -0.89% | -1.45% | -3.01% | -3.63% | -4.17% |
| % Change year | +1.14% | +0.39% | -1.93% | -2.89% | -3.72% |
