Good Evening,
The landscape of the market has significantly changed over the past several years. This is largely due to central bank manipulation. You can argue that this is good or bad. My feeling is that it is mostly bad. I will admit that it is a mixed bag. I have come to realize that things are probably not going to change. As economies and markets go south, governments are going to feel the necessity to intervene. That is just a sign of the times and we just can’t change it.
They say that necessity is the mother of invention and I have come to realize that we must adapt to the things we cannot change and move on as best we can. If the market gets to the point that we can’t make any money, then no one else will either.
In 2014, we have been forced to chase stocks to higher levels of valuation, which we never would have done in the old days. We have been forced to buy at every weakness and disregard the fact that the market should probably be heading down… to disregard the potential loss of a significant portion of our portfolios. Now, here we are yet again, with a market that is showing weakness, but refusing to collapse. While I anticipated this action it is still unsettling and leaves me with an extremely uncomfortable feeling. However that is nothing new as I have had it all year. That is a hallmark trait of this bull market. It is not celebrated and traders just don’t like it. Why? Because they all feel uncomfortable too. All we can do at this point is read our charts and adapt our indicators to the overall market conditions. That said, we have developed a set of indicators that are working great at this time. We must continue to read our charts and follow these indicators and develop new ones in the event that these are no longer effective. Many will argue that it takes no skill to navigate this market as it just keeps rising, but that’s for now. Most active fund managers will differ with that opinion and tell you that this market takes more skill than ever to negotiate and I am one of them.
Active funds (pretty much to the last one) are under-performing this year, but don’t give up on them. When the market does undergo the big one, these funds will be the place where you want your money. If you don’t remember anything else I wrote then remember this: Nothing goes up forever. Nothing….
The market set new records again today. Are you all as excited as I am?! (Note the sarcasm). Both the Dow and the S&P clocked close to a +.20% gain. Nothing to jump up and down over, but a record nonetheless. Thanks to small caps coming back, the TSP beat the S&P and Dow today. AMP, on the other hand, matched the gains of the of the S&P and Dow. However, both allocations trailed the moderate gain set by the Nasdaq. I guess you can’t have it all. AMP is doing well though, as it has posted gains on most days and is up nicely on the month. Remember, it’s not what you make but what you keep!!!
Dow, S&P 500 end at records after U.S. data, Intel outlook
The day’s action left us with the following signals: C-Buy, S-Buy, I-Neutral, F-Neutral. Yeah, that’s right, the I Fund whipsawed slightly. Well, here’s to diversity! As of the close of business today, we will be invested at 50/C, 20/S, 30/I. I guess we’ll see if the I fund can keep up its recent upward trend! Our allocation is now -1.23% on the year not including today’s gains. Here’s the latest posted results:
| 11/19/14 | |||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 14.5823 | 16.6319 | 26.9676 | 35.4849 | 24.9943 |
| $ Change | 0.0009 | -0.0217 | -0.0387 | -0.2179 | -0.0725 |
| % Change day | +0.01% | -0.13% | -0.14% | -0.61% | -0.29% |
| % Change week | +0.03% | -0.16% | +0.47% | -0.46% | +0.44% |
| % Change month | +0.11% | -0.07% | +1.70% | +0.05% | -0.55% |
| % Change year | +2.07% | +5.66% | +12.95% | +5.39% | -2.23% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 17.4061 | 22.876 | 24.7857 | 26.3523 | 14.9579 |
| $ Change | -0.0094 | -0.0319 | -0.0461 | -0.0585 | -0.0374 |
| % Change day | -0.05% | -0.14% | -0.19% | -0.22% | -0.25% |
| % Change week | +0.08% | +0.16% | +0.19% | +0.19% | +0.22% |
| % Change month | +0.26% | +0.43% | +0.51% | +0.56% | +0.59% |
| % Change year | +3.51% | +4.96% | +5.65% | +6.11% | +6.36% |
Lets take a look at the S Fund today. (Chart courtesy of Stockcharts.com)
I pretty well annotated everything. As you can see, the S Fund posted a nice gain, making back everything it lost yesterday and a little more. It is now trading in a sideways channel so we will have to watch carefully to see when it breaks out of the channel one way or the other. If it breaks up, the upper target is around 88.70. Should it go down, support is at 83. Also of note, the PMO has flattened out which is slightly bearish. That has a great deal to do with our decision to allocate some funds to the I Fund.
As I have a said and said and said, everything is currently going along as our charts predicted. I know I’m repeating myself, but there’s only so many ways to say the same thing. The market continues to melt up so our job is to get what it has to give and to monitor our charts for a timely exit. With God’s help we should accomplish both tasks well. That’s all for tonight. I have to go take my sweetie out for her birthday dinner. A godly spouse is a true gift from God. He blesses all those who diligently seek Him! He has never let me down and He has never let our group down. May He continue to bless your trades. Have a great evening!
God bless,
Scott
