09/19/14

Good Evening,

No doubt about it. Today was a classic sell the news market. The news catalyst was the massive Alibaba IPO. While it is an irritation to be sure, I don’t consider it a trend breaker. It’s more of a bump in the road. Unless something fundamentally changes in the coming weeks the trend is still up and we must honor it. We have a system and we’ll stick to it. That is, to react to what our charts tell us, and so far today is not a deal breaker. As of this writing, both TSP and AMP are off, mostly due to a large dip in small caps. However, we will leave small caps (for TSP the S Fund) in our allotments as they normally start out performing large caps in late October or early November and do so through the end of the year. Historical data tells us that small caps out perform large caps 75 to 100% of the time during these months. Many traders refer to it as the “January effect” although it seems like January comes earlier each year… This is another good example of why it is good to maintain a balanced portfolio. I will be leaving early for a car show this evening so the final results are not in, but barring a miracle buying spree, both TSP and AMP will post moderate losses on the day. Also worth mentioning is the fact that today is quadruple witching day. Without getting into a large explanation of this phenomena, many shares change hands as a result of it and the effects only last for a day or so. All that said, we could spend next week drifting sideways with a negative bias, as there isn’t really any market changing news scheduled for the week. Of course, we’ll keep an eye on the charts for any curve balls. 

US stock indexes turn mixed in afternoon trading

afterChinese e-commerce giant Alibaba debuts

 

So far, the weeks action has given us the following signals: C-Buy, S-Neutral, I-Sell, F-Sell. We are currently invested at 40/C, 60/S. Our allocation is now -3.48% on the year not including today’s results. Here are the latest posted results:
09/18/14
Fund G Fund F Fund C Fund S Fund I Fund
Price 14.5263 16.3959 26.383 35.5312 26.0293
$ Change 0.0008 -0.0112 0.1323 0.1104 0.1061
% Change day +0.01% -0.07% +0.50% +0.31% +0.41%
% Change week +0.03% -0.03% +1.32% +0.04% +0.15%
% Change month +0.11% -1.12% +0.51% -1.02% -1.01%
% Change year +1.68% +4.16% +10.50% +5.53% +1.82%
  L INC L 2020 L 2030 L 2040 L 2050
Price 17.3272 22.8199 24.7398 26.3157 14.9582
$ Change 0.0156 0.0518 0.0712 0.0863 0.0555
% Change day +0.09% +0.23% +0.29% +0.33% +0.37%
% Change week +0.19% +0.41% +0.50% +0.55% +0.61%
% Change month -0.01% -0.11% -0.17% -0.22% -0.25%
% Change year +3.04% +4.70% +5.46% +5.97% +6.36%
Here’s what the C Fund looks like today. Chart Courtesy of stockcharts.com with analysis by yours truly…..
All the indicators are in a positive configuration, with the exception of the MAC D, which is only slightly negative and improving. Most important is the positive crossover in the PMO today, which is bullish. We’ll cross our fingers and hope that we don’t get whipsawed on this signal. Overall, this is a very healthy chart although it is a bit extended. However, it shows no significant signs of slowing down at this time. By that matter of fact, I would even point out that is showing some real strength during a period of weakness, which bodes well for the long-term outlook of this fund.
C Fund.png
As I noted earlier, the S Fund is tanking today, but I feel that small and mid caps will start to improve in the coming weeks. So we will not sell this fund unless we get a sell signal on its chart. As for AMP, it is well balanced and will not be changed unless the overall character of the market changes. That’s all for today. I’m going cruising in the purple car. Keep praying and God will be faithful to bless! Have a great weekend.
God bless,
Scott8-)

 



Written By

Scott Grimes

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