Good Evening, There’s no skirting around the fact that this was a bad day. Yesterday’s negative feelings took root which led to a good old fashioned sell off. The market is frustrated with the lack of progress being made on repealing and replacing Obamacare. Even more to the root of the problem investors are concerned that other issues (namely Trump tax cuts) are being kicked down the road. The Trump rally which started in November has been fueled entirely by those tax cuts. So there, in a nutshell, is the problem. Today’s dip was deep. So how much deeper will it go?? I have no idea. I will echo my recent comments that prudent investors that have played defense (Sold) over the past few years have been punished for doing so every time. Each time the market has dipped it has come back with a vengeance and left those folks choking on dust and playing catch up. That has been the pattern and up to now nothing has changed. Once that pattern has been broken we can honor the selling. However, until it does we must wait for the market to snap back. Doing anything else up to now has been a recipe for underperformance. I don’t like it, but sometimes Mr. Market doesn’t care what I like!!
The selling today left us with the following results: Our TSP allotment dropped 2.29% as small and midcaps were hammered. For comparison, the Dow lost 1.14%, the Nasdaq 1.83%, and the S&P 500 -1.24%. Owe, that hurt!!!!!
Wall Street sinks on fears of delays to Trump tax cuts
The days action left us with the following signals: C-Neutral, S-Neutral, I-Buy, F-Neutral. Our TSP allotment is now +4.45% for the year not including today’s results. Here are the latest posted results:
| 03/20/17 | Prior Prices | ||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 15.2652 | 17.5211 | 32.8836 | 42.8203 | 26.4134 |
| $ Change | 0.0030 | 0.0301 | -0.0653 | -0.2099 | 0.0059 |
| % Change day | +0.02% | +0.17% | -0.20% | -0.49% | +0.02% |
| % Change week | +0.02% | +0.17% | -0.20% | -0.49% | +0.02% |
| % Change month | +0.13% | -0.52% | +0.53% | -0.20% | +2.86% |
| % Change year | +0.52% | +0.42% | +6.51% | +4.45% | +7.36% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 18.7202 | 25.1942 | 27.9646 | 30.0577 | 17.2106 |
| $ Change | -0.0018 | -0.0128 | -0.0264 | -0.0354 | -0.0244 |
| % Change day | -0.01% | -0.05% | -0.09% | -0.12% | -0.14% |
| % Change week | -0.01% | -0.05% | -0.09% | -0.12% | -0.14% |
| % Change month | +0.29% | +0.50% | +0.71% | +0.81% | +0.91% |
| % Change year | +1.68% | +2.93% | +4.21% | +4.84% | +5.42% |
Now lets take a look at the charts. All signals are annotated with green circles. If you click on the charts they will become larger.
C Fund:
S Fund:
I Fund: No doubt about it. The I Fund is outperforming. Even after todays selloff it has maintained it’s buy signal. Also worth noting, it’s SCTR has now risen to 72.4. That is the best of our equity based thrift funds.
F Fund: Bonds are waking up a little but that is more a result of stocks doing poorly than good fundamentals in the bond market. Beware of higher interest rates!!!
We suffered a setback today, but we weren’t alone. Our first task is to monitor the market and see if it continues the long standing pattern of bouncing back with a V shaped recovery. Our second task is to monitor our charts to ensure that we do not get a sell signal in the S fund. Right now (due to the above mentioned V Shaped recoveries) we are using soft indicators that will keep us in the market longer to avoid being whipsawed. A sell signal would require price’s 5 EMA to pass down though it’s 200 EMA with all other indicators in negative configurations. Our third task (should the market recover) is to observe the I Fund to see if it continues to outperform the S Fund and if that takes place to look for good entry and exit points respectively. All that said, keep an eye out for an E-Mail or phone app Alert in case we adjust our allocation. That’s all for tonight. Have a great evening and may God continue to bless your trades!
