Good Evening,
This might sound a little bit funny after a day like today, but we’ve got them right where we want them. Although this sell off came a little quicker than the past three we mentioned yesterday, it fits the script that played out in those three instances. While timing might not be exactly the same, everything else is, so a real bounce could be coming in a matter of days. Here’s the post from yesterday just to jog your memory:
So far in 2014 there have been three pull backs. The first was in early January followed by one in April and then one in August. In all three cases we had a large failed bounce before we found support and moved to new highs. There were a few days of poor action just like the ones that started this week and then we rolled over again. The second pull back then set us up for what has now become the standard V- shaped bounce. Today’s bounce went right along with that pattern. If the pattern plays out for a fourth time then this bounce should last a few days before we pullback again sometime next week. That will shake out the uncommitted bulls and set us up for another nice run. The market usually isn’t predictable, but this pattern has been the same in all three pull backs noted earlier. It was way too consistent not to notice. We’ll know for sure if the next bounce succeeds. However, if it does not, Katie bar the door!! That would break the pattern! We’ll see.
Hopefully we will see! We are carrying a lot of cash in both TSP and AMP so we should be able to take advantage of a big run if it comes. Even at that, it was still painful today.
Tech trouble sparks wave of selling on Wall Street
The day’s action left us with the following signals: C-Neutral, S-Sell, I-Sell, F-Sell. We are currently invested at 60/G, 40/C. Our allocation is now -5.47% on the year not including today’s results. Here are the latest posted results:
| 09/24/14 | |||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 14.5314 | 16.4484 | 26.2155 | 34.7086 | 25.6815 |
| $ Change | 0.0008 | -0.0253 | 0.2046 | 0.2500 | 0.0143 |
| % Change day | +0.01% | -0.15% | +0.79% | +0.73% | +0.06% |
| % Change week | +0.03% | +0.11% | -0.59% | -1.62% | -1.23% |
| % Change month | +0.14% | -0.81% | -0.13% | -3.32% | -2.34% |
| % Change year | +1.71% | +4.49% | +9.80% | +3.08% | +0.46% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 17.2984 | 22.696 | 24.5583 | 26.0841 | 14.8065 |
| $ Change | 0.0196 | 0.0637 | 0.0890 | 0.1101 | 0.0699 |
| % Change day | +0.11% | +0.28% | +0.36% | +0.42% | +0.47% |
| % Change week | -0.15% | -0.47% | -0.62% | -0.74% | -0.85% |
| % Change month | -0.17% | -0.65% | -0.91% | -1.10% | -1.26% |
| % Change year | +2.87% | +4.13% | +4.69% | +5.03% | +5.28% |
Today was ugly so you’ll see a lot of red on the results when they are updated.
Here’s what the C Fund looked like. Chart courtesy of Stockcharts.com.
Yes, it was ugly, but the chart is still hanging on to a neutral signal, but not by a lot. Next resistance is in the 1950 Range and should that be breached, look for it to drop to 1900 before it slows down. I drew a new ascending lower resistance line. If my hunch plays out it will bounce somewhere near that. The PMO, MAC D, and Williams %R are now showing sell signals and the EMA’s are still showing buy.
Not much to add here tonight. We anticipated this sell off and are flush with cash for a run up. Of course, there’s always the chance that the character of this market has finally changed. Given the low interest rates, I don’t think so, but in this crazy business you never know for sure. We must now be disciplined and do what our charts say to to do. This is exactly what I was talking about last night! What we do now will determine the outcome. May God guide our hand! Give Him all the praise!
Have a nice evening.
God bless,
Scott
