Good Evening,
The market tried to rally today, but tech stocks and concern over the Russian Ruble drove it back down hard. This is the third straight session that stocks were lower. However, if you include one slightly good day, four out of the last five sessions were horrific with the S&P off in the neighborhood of four percent. Most troubling is that nothing (with the exception of long term treasuries and a few corporate bonds) is working. Stocks and precious metals are getting hit hard. Stocks I understand, but precious metals? Nevertheless, the Fed Meeting minutes will be released in the afternoon. Look for the Fed to say soothing words to the market in lieu of the situation in oil. If the market listens, then we should get a nice bounce, possibly even into the new year. If not…..run for the hills.
Of particular interest to investors will be any hints in the Fed Statement concerning the raising of interest rates in 2015. If they remove the statement that rates will be low “for a considerable time” then Katie bar the door. If not, then the FED statement should have a positive effect on the market. Then, there is oil: Why does lower oil bother the market? Because the price of oil was inflated by all the abundant and cheap money that the FED pumped into the economy. Now that the oil bubble has popped, investors are concerned that it may start a contagion effecting other areas of the economy. In other words, they are thinking if oil, then why not stocks? You may remember I said several times that there would be a price to pay for all this cheap money… This is exactly what I was talking about. Perhaps now we will see if all the market manipulation was worth it.
The day’s action resulted in our TSP allotment posting a small -0.07% loss while AMP dropped another -0.61%. I have no concern about the AMP allotment as it is positioned well for some nice gains into the new year. In comparison the Dow dropped -0.65% and the S&P gave up -0.85%. While our goal is to always beat them we prefer to do so while we are making money, even when they lose. To say that we didn’t lose as much as they did is not acceptable. A loss is a loss. We seek to avert that whenever possible. That said, sometimes you have to pay to play…
Wall St. falls third session, led by tech, discretionaries
The day’s action left us with the following signals: C-Sell, S-Sell, I-Sell, F-Buy. We are currently invested at 80/G, 20/S, but will be putting in an interfund transfer for 100/G that will be effective tomorrow at the close of business. Were I not out of trades, I would move to 100/F. If you are fortunate enough to have a trade left, that would be my advice for you. We may get a bounce into the new year, but the risk is not worth the reward. Protect your capital and live to fight another day! Our allocation is now -3.82% on the year not including today’s results. Here are the latest posted results:
| 12/15/14 | |||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 14.6037 | 16.7803 | 26.2313 | 34.5706 | 23.7476 |
| $ Change | 0.0024 | -0.0231 | -0.1660 | -0.3117 | -0.3541 |
| % Change day | +0.02% | -0.14% | -0.63% | -0.89% | -1.47% |
| % Change week | +0.02% | -0.14% | -0.63% | -0.89% | -1.47% |
| % Change month | +0.09% | +0.08% | -3.68% | -3.81% | -5.99% |
| % Change year | +2.22% | +6.60% | +9.87% | +2.67% | -7.11% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 17.32 | 22.5048 | 24.2596 | 25.7058 | 14.5331 |
| $ Change | -0.0294 | -0.1058 | -0.1480 | -0.1811 | -0.1174 |
| % Change day | -0.17% | -0.47% | -0.61% | -0.70% | -0.80% |
| % Change week | -0.17% | -0.47% | -0.61% | -0.70% | -0.80% |
| % Change month | -0.79% | -2.21% | -2.86% | -3.29% | -3.76% |
| % Change year | +2.99% | +3.25% | +3.41% | +3.51% | +3.34% |
Let’s take a look at the SPY with the Decision Point Crew tonight: (Chart courtesy of Stockcharts.com)
The question right now: When price will locate support? The next possible stop could be at the August low, but the strongest area of support is further down along the rising bottoms line drawn from the February low. Notice that volume has been increasing as price drops, which is bearish since more are participating in the decline.
Conclusion: Indicators are somewhat mixed but are mostly bearish. Short-term indicators tell us to possibly expect a price bottom soon because they are so very overbought, but this would be in the shorter term. Intermediate-term indicators tell us to expect more decline even should there be a bounce as short-term indicators suggest. Until one or both bottom, we should expect lower prices to continue.
