12/11/17

Good Evening, Breadth wasn’t very good today, but renewed interest in beaten down tech stocks and energy kept the major indices in the green. Advancing issues outnumbered declining ones on the NYSE by a 1.18-to-1 ratio; on Nasdaq, a 1.14-to-1 ratio favored decliners. So it was a selective group of stocks that made the money. Also, not to be overlooked is the blockchain/cryptocurrency hysteria. Traders continue to remain interested in this highly speculative group of stocks. I’m not a partaker myself, but I can understand why their doing it. There has been a lot of money made and it has been made quickly. It’s just not a good place for retirement money or for that matter any money that you can’t afford to lose. It sure reminds me an awful lot of a bubble…… Just saying.

On another note, we remain invested in the S Fund to take advantage of a seasonally friendly time of the year for small caps. In his blog today Tom Bowley had a nice section covering Historical Tendencies. For those of you who are wondering why we continue to stick with the S Fund this is why.

“I’ve discussed the Russell 2000’s propensity to rise during the month of December.  December has resulted in rising prices for small caps 26 times in the last 30 years.  But in 2017, the RUT is down more than 1% in the first 10 days of the month.  What’s going on?  Well, let me break it down for you.  Here is the annualized return of the RUT since 1987, broken down into the first and second half of December:

December 1-15:  -3.27%
December 16-31:  +74.88%

We haven’t hit the Russell 2000’s seasonal sweet spot just yet.  17 times in the past 30 years we’ve seen the RUT gain more than 3% in the second half of December.  9 times we’ve seen those gains exceed 5%.

Here are the only four years that the Russell 2000 has failed to advance from the December 15th close through the December 31st close:

2002:  -1.26%
2005:  -1.68%
2006:  -0.64%
2016:  -0.68%

While there are never any guarantees, history has proven that you want to have exposure to small cap stocks during the Santa Claus rally.”

That folks is why we remain committed to the S Fund…….

 

The days action left us with the following results: Our TSP allotment managed a small gain of +0.04%. For comparison, the Dow added +0.23%, the Nasdaq +0.51%, and the S&P 500 +0.32%. It just wasn’t a small cap kind of day but that should change soon.

 

Wall Street ends higher with help from tech, energy

The days action left us with the following signals: C-Buy, S-Buy, I-Neutral, F-Neutral. We are currently invested with 100% in the S Fund. Our allocation is now +18.04% for the year not including the days results. Here are the latest posted results:

 

12/08/17 Prior Prices
Fund G Fund F Fund C Fund S Fund I Fund
Price 15.5174 18.0783 37.2675 47.9175 30.1497
$ Change 0.0010 -0.0016 0.2074 0.1597 0.1135
% Change day +0.01% -0.01% +0.56% +0.33% +0.38%
% Change week +0.05% -0.02% +0.39% -0.41% +0.09%
% Change month +0.05% +0.27% +0.19% -0.67% -0.72%
% Change year +2.18% +3.61% +20.71% +16.88% +22.55%
  L INC L 2020 L 2030 L 2040 L 2050
Price 19.473 26.7293 30.4584 33.1307 19.1714
$ Change 0.0193 0.0469 0.0885 0.1128 0.0737
% Change day +0.10% +0.18% +0.29% +0.34% +0.39%
% Change week +0.07% +0.09% +0.12% +0.13% +0.14%
% Change month +0.01% -0.03% -0.10% -0.13% -0.17%
% Change year +5.77% +9.20% +13.50% +15.55% +17.43%

 

 

 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:
I Fund:
F Fund:
Now is the time for patience. Our strategy of moving to the S Fund will be either be proved right or wrong in the next week or so. Whether congress is able to pass a corporate tax cut  will likely have a lot to do with whether or not we are successful. I feel confident in our position but I admit that I am a bit surprised that the S fund has been flat so far in December. That said, I think that small caps are ready to uncoil at the first sign of positive tax reform news. You might say I bet the farm on it……. That’s all for tonight. Have a nice evening and may God continue to bless your trades!
God bless, Scott 8-)
 
 ***Just a reminder that you can review the performance of our allocation at the Web Site TSPTALK.com in the autotracker section under the screen name KyFan1.
 
 
I produce and publish this blog as both a ministry and for the benefit of any Federal Government Employee. This is done to offer you some guidance as to how to approach your retirement more financially successful. When it is time for you to retire, I recommend you utilize the services of a Professional Money Manager, who works with a reputable investment firm. He understands the guidance you have already received and he can manage your savings assets utilizing a more advanced investment program into the future. 
 
If you would like to receive more information about this introduction, please feel free to contact me at  [email protected]. 

 

 

 

 

 



Written By

Scott Grimes

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