Good Evening,
The Dow was up 43 points, but it didn’t tell the story. There are days when the major indices don’t give an accurate snapshot of what is going on and this was one of them. Small Caps and Tech Stocks took a beating. Why not 100% S you say? This is why not: The S Fund was off -0.90% while the C fund was only off -0.07%. I have often said the S Fund is like taking the elevator up and jumping out the window to go down. Don’t get me wrong. I love the S Fund and I was one of the first traders to go 100% S, and I will do it again. Just not when I think small caps are going to go down. I didn’t point this out to talk bad about the S Fund though. I pointed it out to show how the Dow and S&P didn’t show how bad the action under the surface really was. The Nasdaq was off -1.07%. That’s quite a contrast from the Dow that was up +0.26%. That’s my point….. The AMP program fared well, considering the day, as it only posted a slight decline. It is very defensive and will remain so until after the FED meeting on Wednesday. That’s when we’ll know where this thing is heading. Remember the last newsletter? It’s all about the FED!!!!
Stocks mixed ahead of Fed; small companies slump
| 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 straddled the horizontal support line drawn from the July high. The thumbnail gives you a clear picture of trading of the past month. A rise to a peak and then a slow move lower. We are looking at a nearly perfect bearish rounded top. Additionally, a bearish rising wedge is also visible on the daily chart. There is a clean negative PMO crossover from last week.”
“Conclusion: Indicators in all time frames are quite bearish. Support is holding…barely. There is fear regarding the possible outcomes of the FOMC policy meeting that should keep things in a holding pattern for at least another day. After that, it’s anyone’s guess as to how the market will react to any news, whether it is technically positive or negative. This instability is the not the best foundation for a renewed rally, instead it could be the excuse the market needs to start a correction. “
I agree, things are looking bearish. It’s my belief that the FED will not raise interest rates until the recovery is solidly in place. My expectation is that any pullback as a result of this FED meeting will be a good buying opportunity. That said, nobody knows for sure what will happen or how the traders will react to it. You can bet that I’ll be watching my charts closely on Wednesday. As far as TSP, we’ll try to weather the storm so we can catch the next leg up. In AMP we’ll be looking to buy if things go up and we’ll already be in the right place if they don’t. That’s all for tonight. Stay buckled in, it’s going to be a wild week! May God continue to bless your trades.
