Good Evening,
The market rolled back a little more today and one thing is for sure, it’s all about the FED. Traders are getting a little uptight about the FED meeting next week. Encouraging economic news is worrying them that the FED will increase interest rates sooner rather than later. While it’s not likely that interest rates will be increased at this time, everyone will be watching for less dovish/more hawkish language in the FED statement that will be released on Wednesday afternoon. There will more than likely be more selling up to that announcement. Then it is anybody’s guess what will take place. ATS (according to Scott), a likely scenario will be that the FED will not say anything to upset the apple cart and traders will return to stocks and send them to new records. A less likely scenario is that the FED will say something hawkish and the sell off will be on in earnest, which would not be all that bad of a thing since a nice reset would present us with better opportunities than we have had in a while. We will keep our TSP allotment in, as it is now barring enough selling between now and Wednesday to generate sell signals in the C and S Funds. As far as AMP, we are carrying a high level of cash into the announcement and will be prepared to jump back into equities given a FED induced rally. There will be nice opportunity to catch some quick gains if a rally indeed follows the announcement. Of course, if the reaction is more selling, we will sit back and watch and possibly even lighten our load a little more. With the ever strengthening dollar bringing pressure on bonds, commodities, and precious metals, there is really no place to preserve our capital but cash. That’s the only real advantage that TSP has over the street. There is nothing like the G fund that guarantees a return with no risk. That said, I’d rather be invested on the street, as the upside there is so much greater when things are working well.
Stocks Decline Amid Interest Rate Worries
| 09/12/14 | |||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 14.5213 | 16.4002 | 26.039 | 35.5176 | 25.9894 |
| $ Change | 0.0010 | -0.0573 | -0.1574 | -0.3330 | -0.0498 |
| % Change day | +0.01% | -0.35% | -0.60% | -0.93% | -0.19% |
| % Change week | +0.04% | -0.65% | -1.05% | -1.00% | -1.30% |
| % Change month | +0.07% | -1.10% | -0.80% | -1.06% | -1.17% |
| % Change year | +1.64% | +4.18% | +9.06% | +5.49% | +1.66% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 17.2941 | 22.7275 | 24.6173 | 26.1713 | 14.8676 |
| $ Change | -0.0165 | -0.0552 | -0.0828 | -0.1072 | -0.0694 |
| % Change day | -0.10% | -0.24% | -0.34% | -0.41% | -0.46% |
| % Change week | -0.20% | -0.54% | -0.72% | -0.84% | -0.96% |
| % Change month | -0.20% | -0.51% | -0.67% | -0.77% | -0.86% |
| % Change year | +2.84% | +4.28% | +4.94% | +5.38% | +5.72% |
“Price is pressuring horizontal support, but it continues to hold steady for now. Biggest concern is the new PMO SELL signal that was generated today when the PMO crossed below its 10-EMA. Granted it is only .01 from its EMA so the signal is vulnerable should we get a bounce off of horizontal support.”
“Last week, price tested overhead resistance on the weekly chart. Resistance held firm as this week price fell back.”
“Conclusion: The market formed a nice rounded top but is being stubborn regarding a breakdown through support. Indicators are bearish in all time frames which suggests that it won’t hold for long. At issue is the Wednesday Fed announcement– if it isn’t favorable, bearish indicators will be vindicated as support should be taken out. If the news is positive, it’s anyone’s guess how investors will react, but it would likely be favorable.”
