Good Evening, The FOMC raised rates .25 point today as expected and the major indices finished the day mixed. The Fed statement indicated again that they would unloading some of the approximately 4 Trillion dollars in bonds they purchased during quantitative easing. This is something that the market has a somewhat negative reaction to. Bonds in particular would be impacted negatively by the Fed bonds being dumped on the market. Although, Janet Yellen did state that any reduction of the Fed’s bond portfolio would be gradual and that the amount of bonds maintained by the Fed would be higher than it was prior to the financial crisis of 2009. Nevertheless, the market didn’t seem to find any comfort in that statement. Also weighing on stocks today was the horrific shooting of 5 individuals including the house majority whip in Virginia. Our prayers go out to the victims, first responders, and families affected during this incident. May God heal and comfort them!
I know that I sound like a broken record but key areas of support are holding on our charts so there’s no reason to become overly concerned at this point. We just need to monitor things a little closer than usual. Also, as I continue to mention, summer trading usually has a negative spin to it. Not that I believe in that sell in May and go away junk, but the trading is definitely slower and on lower volume when the temperature rises.
One more thing looking forward. Look at Health care and tax reform as the most serious issues shaping the intermediate term market even more so than Fed policies. If one or both of these things fail to materialize that could bring the upward trend to an end. Not that you shouldn’t watch the Fed, but if you see tax reform in particular and secondly healthcare reform fail to take place then it’s time to sell and run for the hills. It won’t be good.
The days trading left us with the following results: Our TSP allotment slipped back -0.08%. For comparison, the Dow managed a gain of +0.22% while the Nasdaq lost -0.41%, and the S&P 500 dropped -0.10%.
Nasdaq Takes a Hit Again as Bears Target FANG Stocks, Fed Raises Rates
The days action left us with the following signals: C-buy, S-Buy, I-Neutral, F-Buy. We are currently invested at 100/I. Our allotment is now +9.68% on the year not including the days results. Here are the latest posted results:
| 06/13/17 | Prior Prices | ||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 15.3477 | 17.8994 | 33.9708 | 44.2752 | 28.2322 |
| $ Change | 0.0009 | 0.0060 | 0.1612 | 0.3133 | 0.1387 |
| % Change day | +0.01% | +0.03% | +0.48% | +0.71% | +0.49% |
| % Change week | +0.02% | -0.03% | +0.39% | +0.64% | +0.16% |
| % Change month | +0.08% | +0.02% | +1.26% | +2.89% | +0.39% |
| % Change year | +1.06% | +2.59% | +10.04% | +8.00% | +14.76% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 18.984 | 25.7373 | 28.8167 | 31.1006 | 17.8707 |
| $ Change | 0.0207 | 0.0538 | 0.0941 | 0.1191 | 0.0778 |
| % Change day | +0.11% | +0.21% | +0.33% | +0.38% | +0.44% |
| % Change week | +0.09% | +0.15% | +0.23% | +0.27% | +0.30% |
| % Change month | +0.31% | +0.53% | +0.81% | +0.95% | +1.08% |
| % Change year | +3.12% | +5.15% | +7.38% | +8.47% | +9.46% |
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:
F Fund: The PMO whipsawed today generating another buy signal for the F Fund. It’s hard to put much credence in these signals as long as the indicators are flat and until there is a little separation in the signal lines…The MACD is pretty flat as well. One thing to watch is the SCTR which is starting to move up. One interesting thing about the bond market is the separation between what the Fed is saying and what is actually happening. Right now, the bond market is pretty well saying that it doesn’t believe the FED will be raising rates as many times as they say and that they won’t be selling as many bonds as they say. Otherwise, bonds would be tanking. There is no doubt about that….
We’ll see if there’s a post fed hangover or if this market can get it together tomorrow. That’s all for tonight. Have a nice evening!
