01/22/15

Good Evening,

What an interesting day. We started out with a sell the news reaction and dropped into the red. We talked about the set up for a sell the news reaction in yesterday’s newsletter. So what exactly is a sell the news reaction? It is when a market changing event is anticipated and priced in to the market before it happens. Thus, when the event actually occurs, there is an inclination toward profit-taking rather than buying. We also talked about today’s big ECB announcement and went over the various scenarios that could occur. One of the scenarios that we talked about was if the ECB exceeded the market’s expectations. Well, that was exactly what occurred. The ECB managed the expectations of the announcement to perfection. When the announcement finally occurred, the market was quit surprised. The ECB not only exceeded expectations by adding 10 Billion to the rumored purchase making it 60 Billion Euros per month, but they also left the purchases open ended saying that they would continue as long as inflation remained under control. The markets reaction was quite decisive and created yet another surprise on the day. Thought the V Shaped bounce was gone? Think again. The market drove straight up into the close and absolutely punished the under-invested bears, leaving them, as well as many fund managers (Not AMP!), to chase the action. The action led to one of the best days that we have had in TSP and AMP since I can remember. Our TSP allotment posted an impressive gain of +1.655%, but it was AMP that was the king of the day at +1.78%. God has never forsaken our group. Never! And He was with us today! Give Him all the praise and the glory for He and He alone is worthy!

Wall Street gains as ECB prepares to flood markets

 

The day’s action left us with the following signals: C-Buy, S-Neutral, I-Neutral, F-Buy. We are currently invested at 34/C, 66/S. We will be rebalancing our allocation after the close of business tomorrow. Our allocation is now -1.49% for the year, not including today’s gains. Here are the latest posted results:
01/21/15
Fund G Fund F Fund C Fund S Fund I Fund
Price 14.6344 17.0108 26.8365 35.633 24.4446
$ Change 0.0009 -0.0285 0.1299 0.0999 0.1538
% Change day +0.01% -0.17% +0.49% +0.28% +0.63%
% Change week +0.03% -0.09% +0.65% +0.00% +1.18%
% Change month +0.12% +1.24% -1.21% -1.83% +0.93%
% Change year +0.12% +1.24% -1.21% -1.83% +0.93%
L INC L 2020 L 2030 L 2040 L 2050
Price 17.4549 22.8529 24.7231 26.2601 14.879
$ Change 0.0162 0.0562 0.0774 0.0934 0.0607
% Change day +0.09% +0.25% +0.31% +0.36% +0.41%
% Change week +0.15% +0.36% +0.45% +0.50% +0.57%
% Change month +0.02% -0.20% -0.34% -0.45% -0.53%
% Change year +0.02% -0.20% -0.34% -0.45% -0.53%
Here’s the chart for the C Fund. (All Charts courtesy of Stockcharts.com)
The C Fund generated a buy signal today as the MAC D moved into positive territory. That gives us three indicators with buy signals. Using our current set of indicators this generated an overall buy signal.
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The moral of the story is don’t fight the central bankers. It is probable after a run like we had to day that we’ll give back a little tomorrow. However, we will stay put in equities as the current rally should continue. In the same breath, I wouldn’t be the least bit surprised to see the market continue straight up and punish the bears and under-invested bulls. My advice is that if you are looking for an entry point, just get in. Given the recent string of v-shaped recoveries (that, I might add, has not been broken), you may not get an entry point. You just have to grit your teeth and jump in….. That’s all for tonight.
God bless and have a great evening.
Scott8-)


Written By

Scott Grimes

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