Good Evening,
It’s a new month. We’re going to see if we can make it three for three in the fourth quarter! Make no mistake though, this month will be more difficult than the last two. While we do have positive seasonality, we are fighting ever increasing overhead resistance due to an extended market and the falling price of oil. The falling price of oil is a two edged sword. It transfers a lot of wealth into the hands of consumers which is good for the economy. However, if prices fall too much they will hurt the booming energy sector in the U.S., which will be bad for our economy. It’s a fine line between helping and hurting. As a result of all this, coupled with a slow start to the Christmas shopping season, the major indices took their biggest dip in a while today. Both TSP and AMP posted small to moderate losses on the day.
The day’s action left us with the following signals: C-Buy, S-Neutral, I-Buy, F-Buy. We are currently invested at 50/C, 20/S, 30/I. However, I have entered an interfund transfer for 50/C, 50/I that will take effect at the close of business tomorrow. At least for the mean time, small caps are lagging in performance and since the S Fund is a small cap blend. I have decided to allocate those funds to the I fund which continues its recent trend of out-performing the C and S funds. Our allocation is now +0.14% on the year, but unfortunately, that does not include today’s loss. Here are the latest posted results:
| 11/28/14 |
|
|
|
|
| Fund |
G Fund |
F Fund |
C Fund |
S Fund |
I Fund |
| Price |
14.5899 |
16.7673 |
27.2321 |
35.9401 |
25.2606 |
| $ Change |
0.0017 |
0.0270 |
-0.0680 |
-0.3246 |
-0.1234 |
| % Change day |
+0.01% |
+0.16% |
-0.25% |
-0.90% |
-0.49% |
| % Change week |
+0.04% |
+0.56% |
+0.24% |
+0.17% |
+0.47% |
| % Change month |
+0.17% |
+0.74% |
+2.70% |
+1.33% |
+0.51% |
| % Change year |
+2.12% |
+6.52% |
+14.06% |
+6.74% |
-1.19% |
| |
L INC |
L 2020 |
L 2030 |
L 2040 |
L 2050 |
| Price |
17.4579 |
23.0145 |
24.9738 |
26.5802 |
15.1007 |
| $ Change |
-0.0109 |
-0.0470 |
-0.0693 |
-0.0887 |
-0.0581 |
| % Change day |
-0.06% |
-0.20% |
-0.28% |
-0.33% |
-0.38% |
| % Change week |
+0.12% |
+0.20% |
+0.24% |
+0.26% |
+0.28% |
| % Change month |
+0.55% |
+1.04% |
+1.27% |
+1.42% |
+1.55% |
| % Change year |
+3.81% |
+5.59% |
+6.46% |
+7.03% |
+7.38% |
Let’s take a look at the S Fund which threw up a neutral signal today: (Charts courtesy of Stockcharts.com)
The S Fund is now showing a neutral sign with the MAC D and Williams %R both turning negative. Without some very positive action in the next few days, the PMO will probably make a negative crossover of its 20 EMA which will give this chart a sell signal. Given the charts deterioration, it is time to book our profits here and move on to something that is working better.
The market continues to encounter increasing resistance. At some point it will succumb to that resistance and turn down for a correction. However, as reactive traders we don’t make our decision based on what we think is going to happen, even if it is based on good evidence. All trends have a way of going on much longer than we think is reasonable. That is the reason that we base our decision on a change that we can actually see on our charts. It may be obvious, as it is in this case, that something is going to take place, but nobody (and I mean nobody) knows when that will be. If we have done a good job of following the trend, we will be booking a profit when we sell a fund or funds that are giving us a sell signal. One more thing: it is never a bad strategy to book some partial profits when you see things starting to decline. As I have often said, averaging in and out of a position will cover up a multitude of mistakes. Our task is still to get as much as we can out of this trend and then move to safety when it is over. That’s all for tonight. May God continue to bless you trades. Have a great evening!
God bless,
Scott
