Good Evening, This morning there was some bad news about Chinese exports dropping some ten percent along with the usual pre election jitters that led to some selling. However, after an initial nasty gap down the computer algorithms kicked in and the market moved higher the rest of the day. Folks that the way it has been since 2009. The banks and computer trading have changed the face of investing. James DePorre better known in trading circles as “Rev Shark” had this to say about the situation in his daily blog:
“A big part of this action is computerized trading that helps to take emotions out of the action. Once the bounce starts the algorithms can make pretty good money by running things straight up as the poor humans try to adjust to the trading flow. It may make the bulls feel better but the basis for this has little to do with anything that is genuinely positive.
The most obvious clue that this bounce was largely machine driven is that breadth remained around 2 to 1 negative. What drove the action was ETFs and bigger caps and not individual stock picking. That doesn’t mean that the bounce can’t continue. In fact, this is exactly the sort of thing that has led to many V-shaped bounces.
For years now the conundrum that this market has presented is the degree to which we should stick with traditional technical analysis and psychology versus trying to game the central banks and algorithms. The computers and the bankers have corrupted the action and you simply can’t apply the same rules that you used to.”
In plain English, It makes it hard as heck to read the charts.! Can we beat these machines?? The jury is still out, but I will say this, I have been fighting this trend since 2009 and so far my returns haven’t been anywhere close to the 17.8 % per year that I averaged prior to that time. Since then time it has been just about as good to buy and hold which is not very good at all in my book. That said, I have beaten Mr. Market before and I’m not about to quit trying. Dang the machines and full speed ahead!!!
Todays trading left us with the following results: Our TSP allotment gave up -0.59%. For comparison, the Dow lost -0.25%, the Nasdaq -0.49%, and the S&P 500 -0.31%. It was another rough day, but better in the afternoon than in the morning.
Wall Street Claws Back From Lows as China and Oil Worries Fade
The days action left us with the following signals: C-Neutral, S-Neutral, I-Neutral, F-Sell. We are currently invested at 100/S. Our allotment is now +0.80% for the year not including the days results. Here are the latest posted results:
| 10/12/16 | Prior Prices | ||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 15.1203 | 17.8579 | 29.3561 | 38.0058 | 24.2027 |
| $ Change | 0.0007 | -0.0081 | 0.0356 | 0.0147 | -0.2220 |
| % Change day | +0.00% | -0.05% | +0.12% | +0.04% | -0.91% |
| % Change week | +0.02% | -0.13% | -0.67% | -0.76% | -1.54% |
| % Change month | +0.05% | -0.64% | -1.26% | -2.04% | -2.29% |
| % Change year | +1.37% | +5.33% | +6.51% | +7.86% | +0.45% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 18.2124 | 23.9952 | 26.0873 | 27.7483 | 15.7273 |
| $ Change | -0.0071 | -0.0204 | -0.0334 | -0.0417 | -0.0269 |
| % Change day | -0.04% | -0.08% | -0.13% | -0.15% | -0.17% |
| % Change week | -0.18% | -0.40% | -0.59% | -0.70% | -0.79% |
| % Change month | -0.34% | -0.73% | -1.09% | -1.28% | -1.45% |
| % Change year | +2.47% | +3.39% | +4.08% | +4.43% | +4.67% |
That’s all for tonight! Have a nice evening and may God continue to bless your trades.
God bless, Scott 
