12/31/14

Good Evening,

The final trading day of the year went exactly like I thought it would with more end of the year selling. The volume was low as many traders packed up shop and left town. Friday will likely be a low volume day as well, as many of them will make it a long weekend. Today’s selling did accelerate just a little as crude dropped again with US Crude at 53.27 a barrel. The question is, how far will it go? The price of crude dropped to $35.00 a barrel in 2009. So when you look at the fact that we started this slide at over $100.00 per barrel you have to wonder just how far it can go? I project that the bottom will come somewhere in the neighborhood of 35.00 to 42.00. If it is higher, then great. I have a few oil related positions and I plan to hold on to them as long as I can. I bought them fairly cheap and the ride back up will be quite lucrative. Remember, the keys to 2015 will be oil, the FED, and The ECB (European Central Bank). Watch these and you’ll have a good idea where the market is heading. Beyond that, I refuse to make any predictions. I got lucky the last two years, but the truth of the matter is that nobody really knows what’s going to happen and you should be wary of those who say they do. As far as today, we were actually in a good position in TSP at 100/G. The G penny we got was more than most folks earned. Those of you that remained 100/F (and I know that’s more than a few of you) were rewarded for being there again today. AMP allocation gave up -0.479% on the day again besting the big three. For comparison the Dow dropped -0.89%, the Nasdaq fell back -0.87%, and the S&P 500 lost -1.03%.

Wall St. lower but finishes year with solid gains

 

2014 left us with the following signals: C-Buy, S-Buy, I-Sell, F-Neutral. We are currently invested at 100/G, but will be putting in an interfund transfer for 34/C, 66/S effective for 01/03/15. Our allocation finished the year at -3.26%. That is the worst year we have had since we started this group in 1997. Good riddance 2014! Here are the latest posted results.
12/30/14
Fund G Fund F Fund C Fund S Fund I Fund
Price 14.6157 16.778 27.4484 36.5719 24.4325
$ Change 0.0008 0.0145 -0.1314 -0.1660 -0.2147
% Change day +0.01% +0.09% -0.48% -0.45% -0.87%
% Change week +0.02% +0.30% -0.37% -0.11% -0.67%
% Change month +0.18% +0.06% +0.79% +1.76% -3.28%
% Change year +2.30% +6.58% +14.97% +8.62% -4.43%
  L INC L 2020 L 2030 L 2040 L 2050
Price 17.4817 23.0066 24.9568 26.5632 15.0773
$ Change -0.0184 -0.0681 -0.0951 -0.1161 -0.0758
% Change day -0.11% -0.30% -0.38% -0.44% -0.50%
% Change week -0.05% -0.19% -0.25% -0.28% -0.33%
% Change month +0.14% -0.03% -0.07% -0.06% -0.15%
% Change year +3.96% +5.56% +6.38% +6.96% +7.21%
Here’s the last chart of the year courtesy of Stockcharts.com:  Analysis by Decision Point.
Price was gently rolling over but today it broke loose and tumbled lower by almost a full 1%. The 20-EMA provided support but I suspect it won’t hold. The PMO has now turned down and is nearing a negative crossover its EMA which would generate a PMO SELL signal on the SPY. Strong support is nearing around 202, but as I noted yesterday, price is inside a bearish ascending wedge. The ascending wedge pattern precedes a breakdown. So while support appears strong, because it is the bottom of a rising wedge, that support line is tenuous at best.
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Conclusion:  It doesn’t appear that there will be a “happy new year” next week on Wall Street. All of our indicators are configured very negatively and the PMO on the SPY has turned back down. Lower prices are likely ahead.
Next week could well be negative, but we are still showing buy signals in the C and S funds so I’m going to roll with them. It’s been a heck of a year. The challenge was that the indices simply didn’t reflect the action in the average stock. A smaller group of bigger cap names drove the indices while the vast bulk of stocks did little. Five times this year we had corrective action and in each case it was small caps and momentum stocks that lead to the downside and suffered most of the damage. 
A good illustration of how the indices aren’t reflecting the action of individual stocks is an indicator on TCNet which tracks the percentage of stocks trading over the 40-day simple moving average. At the close yesterday it was at 53.03.  In other words, nearly half of the stocks in the market are showing little momentum while the indices are all close to all-time highs. I got that information form RevShark and it pretty much tells the story. I’m not making an excuse for under-performance this year. I’ll take responsibility for that. Although, I do thank God that it is the worst year we have ever had. After all, He guided us through 2001 and 2008/2009 with gains. It’s the average that’s important and He has been with this group the whole way! No, I don’t know what’s going to happen in 2015, but I look forward to seeing what He is going to do for our group next! Give Him all the Praise!
I want to take this opportunity to wish each and every one of you a Happy and prosperous New Year and in the oft change that any body reading this post does not know Him I encourage you to seek Him. How? Romans 10:9-10 says “That if you confess with your mouth, “Jesus is Lord”, and believe in your heart that God raised Him from the dead, you will be saved. For it is with your heart that you believe and are justified, and it is with your mouth that you confess and are saved.”  It’s that simple and don’t let anyone tell you different. He also said this and it is the key to what drives this investment group:
Jeremiah 29-11: “For I know the plans I have for you,” declares The Lord, “plans to prosper you and not to harm you, plans to give you hope and a future.”
Of course that’s here on earth, but it’s nothing when compared to the gift of eternal life that you receive when He becomes your Savior! May 2015 truly be a great year for you and yours and may God continue to bless your trades!
God bless,
Scott8-) 

 



Written By

Scott Grimes

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