Good Evening,

Impressive, most impressive. Every time this market comes back from a gap down open, it surprises me. You would think that it would not. After all, it’s just been doing this on a regular basis since 2009, but you have to keep asking yourself how long this can go on. Nevertheless, we talked yesterday about the selling only lasting a day or two, so this recovery falls well within our expectations. Is the selling over? I just can’t say. The market gave a lot of conflicting signals today so we’ll just have to stick to our charts to see what happens. We knew coming into this month that it was going to be difficult and it has not failed in those expectations. The entire year of 2014 has been difficult. I realize the S&P is up about 11%. However, unless you had the faith to blindly trust that the market would make up for each dip that it took, you are lagging that 11%. I don’t personally know of even one fund manager that is not. Casual observers of this market just don’t realize how difficult it has been to navigate. The major indices have failed to accurately reflect the overall market. The Dow and S&P have been driven by a few big caps while the majority of stocks have done very little, if anything at all. Nobody with any experience in trading is going to stare this bull in the eye and fail to blink. That’s the reason that the other folks will eventually have a bad day. You can have superior returns for a year or maybe even two, but you can never trade like that and have the best returns in the long run. I sometimes like to borrow a saying from Tom Crowley at TSPTALK.COM. Friends don’t let friends buy and Hold! Anyway, as a result of the days trading our TSP allotment had a small loss on the day, but our AMP allotment made a small to moderate gain. 

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S&P 500 erases early losses to end flat; energy, tech up

 

 

The day’s action left us with the following signals: C-Neutral, S-Neutral, I-Sell, F-Buy. We are currently invested at 50/C, 50/I, but will be rebalancing our allotment to 80/C, 20/S.  Our TSP allotment is now -0.52% on the year not including today’s results. Here are the latest posted results:

12/08/14
Fund	G Fund	F Fund	C Fund	S Fund	I Fund
Price	14.5981	16.7189	27.1514	35.6032	25.0589
$ Change	0.0024	0.0370	-0.1945	-0.3854	-0.1005
% Change day	+0.02%	+0.22%	-0.71%	-1.07%	-0.40%
% Change week	+0.02%	+0.22%	-0.71%	-1.07%	-0.40%
% Change month	+0.06%	-0.29%	-0.30%	-0.94%	-0.80%
% Change year	+2.18%	+6.21%	+13.72%	+5.74%	-1.98%
	L INC	L 2020	L 2030	L 2040	L 2050
Price	17.4442	22.9523	24.882	26.4638	15.0251
$ Change	-0.0195	-0.0754	-0.1089	-0.1372	-0.0887
% Change day	-0.11%	-0.33%	-0.44%	-0.52%	-0.59%
% Change week	-0.11%	-0.33%	-0.44%	-0.52%	-0.59%
% Change month	-0.08%	-0.27%	-0.37%	-0.44%	-0.50%
% Change year	+3.73%	+5.31%	+6.07%	+6.56%	+6.84%

   The I Fund took the fast track to a sell signal today so we’ll take a look at it this evening. (All charts courtesy of Stockcharts.com)

What a difference a day makes. It was close and is definitely subject to a whipsaw, but the I Fund managed to put up a sell signal today. We will heed the signal and sell the fund. If an outside influence can be attributed to this signal it would be Mario Draghi and the ECB’s lack of action on the European QE program. Had they taken the action that had obviously been priced into our earlier charts, I am certain we would not be selling this fund. Central bank action has been the main moving factor for the past few years, no doubt about it! This signal is close, but without real time trading in TSP we cannot afford to sit back and watch. Should this signal whipsaw before noon tomorrow we will cancel our interfund transfer. Otherwise, we will make our move to 80/C, 20/S at the close of business tomorrow.

Just when you think you’re running something in the 2014 market, it lets you know otherwise. We are out of trades for the month of December unless we move to the G Fund. By all rights and reasons, we should have some money allotted to bonds (The F Fund), but with the lack of trades we would be unable to move back into stocks so we are forced to take a bigger risk than we would prefer by going 100% equities at this time. Things like this make it far easier to make money outside of TSP than in Thrift, which is the reason that all my personal funds are in the Advanced Management Program, better known as AMP. I’m not necessarily trying to sell you anything as much as I’m trying to impress upon you the differences of trading inside and outside of TSP. I have often said that it is a great program while you are getting the matching funds, but not a day longer! That’s all for tonight. Have a nice evening and may God continue to bless your trades!

God bless,

Scott