Good Evening, Today the market was all about oil again. The crazy thing about it is that stocks are going the opposite direction that they should go in with rising oil. I know that it’s Santa Rally time, arguably the best three weeks in the year, but the market reaction to oil is crazy! Only 7% of stocks in the NYSE actually benefit from higher oil prices. That means that 93% do not. So why are they trading in lock step with oil??? I say (and I’m not the only one) that trading computer algorithms are currently programed to buy when oil goes up. Why is it that way? My best guess is that it takes advantage of the psychology of the herd and has nothing to do with fundamentals. That is the reason that the major indices and the charts have often been misleading in the past few years which has led to large scale hedge fund underperformance. In short it’s been hard as heck to navigate this market. The action has spawned a new generation of traders that know nothing but to buy and hold. That is OK when there is not a lot of market variance, but what about when it goes down? I mean when it really goes down! This generation of traders has not experienced that. Thus, they really have no fear of it. All that said, my experience is that there is always a way to make money and if what your doing is not working then you need to tweak your trading model just a bit. That’s what I intend to do….you must always strive for efficiency!

The days action left us with the following results: Our TSP allotment was steady in the G Fund. For comparison, the Dow gained +1.06%, the Nasdaq +0.90%, and the S&P 500 +1.24%. So far we’ve sat this one out. We’ll keep an eye on our charts. It’s tough to find a good entry point at this time.

On Wall Street, oil proffers modest Santa Claus rally

The days action left us with the following signals: C-Neutral, S-Sell, I-Sell, F-Sell. We are currently invested at 100/G. Our allocation is now +0.20% on the year not including the days results. Here are the latest posted results:

Lets take a look at the charts: (All signals annotated with Green Circles)

C Fund: We’ll keep an eye on this one tomorrow. Should the 5 EMA cross back up through the 50 EMA and either the MACD or PMO move into a positive configuration we may take another shot at equites in 2015.

S Fund:

I Fund:

F Fund:

 

We’ll keep an eye on the C Fund to see if it’s truly safe to get back into equites. I know that we are sitting out a small rally. However, we must still do our best to time our entry into equities or we will get whipsawed again. If that were to happen we would most assuredly give up our modest gain on the year as well as some of our contributions. Especially in this case, “It’s not what you make that’s important. It’s what you keep”! The market will be open for a half a day tomorrow. I’ll put out an alert if there are any changes to our allocation. However, it’s been a tricky year to trade and I’m inclined to be very careful. 

Let me take this time to wish each and everyone of you a Merry Christmas. Have a great time with your families and take a little time to reflect on the most precious gift of all. Our Lord and Savior, Jesus Christ.  

 

God bless, Scott

 

***Just a reminder that you can review the performance of our allocation at the Web Site TSPTALK.com in the autotracker section under the screen name KyFan1.

 

 

I produce and publish this blog as both a ministry and for the benefit of any Federal Government Employee. This is done to offer you some guidance as to how to approach your retirement more financially successful. When it is time for you to retire, I recommend you utilize the services of a Professional Money Manager, who works with a reputable investment firm. He understands the guidance you have already received and he can manage your savings assets utilizing a more advanced investment program into the future. 

 

If you would like to receive more information about this introduction, please feel free to contact me at  [email protected].