Good Evening, In the last month are so we discussed a couple of landmines that could damage the current rally. One of them was North Korea which put a dent in things last week but reversed this week. The other which I said may be the more serious of the two and could throw the rally completely in reverse was failure by the Trump administration to pass tax reform. Today investors started to doubt that tax reform will be passed which resulted in the biggest one day drop for the S&P 500 in three months. Sometimes I hate to be right and this is one of them. The question we have to ask ourselves now is if this is another one and done selloff or if the bears will finally get their long awaited correction. As I noted in a few recent blogs, the pattern of dip buying is still in place. There were big selloffs on March 21, May 17, June 27 and August 10. In each instance the market turned around the next day. No doubt the machines are still programmed to buy dips. So we’ll see how it goes tomorrow…..
The days blood bath left us with the following results: Our TSP allotment dropped -1.12% and would you believe that it was the best of the bunch? For comparison, the Dow lost -1.24%, the Nasdaq 1.94%, and the S&P 500 -1.54%.
S&P 500 posts biggest decline in three months on Washington worries
The days action left us with the following signals: C-Neutral, S-Neutral, I-Neutral, F-Buy. We are currently invested at 100/I. Our allocation is now +11.80% not including the day’s results. Here are the latest posted results:
| 08/16/17 | Prior Prices | ||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 15.4085 | 18.0245 | 34.4772 | 43.744 | 28.7765 |
| $ Change | 0.0009 | 0.0377 | 0.0586 | 0.1053 | 0.1187 |
| % Change day | +0.01% | +0.21% | +0.17% | +0.24% | +0.41% |
| % Change week | +0.03% | -0.05% | +1.15% | +0.94% | +0.54% |
| % Change month | +0.10% | +0.37% | +0.08% | -1.75% | -0.36% |
| % Change year | +1.46% | +3.30% | +11.68% | +6.70% | +16.97% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 19.0957 | 25.9254 | 29.0818 | 31.4089 | 18.0573 |
| $ Change | 0.0130 | 0.0293 | 0.0502 | 0.0630 | 0.0404 |
| % Change day | +0.07% | +0.11% | +0.17% | +0.20% | +0.22% |
| % Change week | +0.21% | +0.37% | +0.59% | +0.69% | +0.78% |
| % Change month | +0.04% | -0.04% | -0.15% | -0.21% | -0.27% |
| % Change year | +3.72% | +5.91% | +8.37% | +9.55% | +10.61% |
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: Price broke though the bottom trend line and closed beneath is 50 day moving average.
S Fund: This ones in a free fall and I feel that it most accurately reflects what is going on in the market right now. Price closed for the third consecutive day below it’s 100 Day Moving average. The 5 EMA passed down though the 100 EMA. Price also violated it’s lower trend line. Finally, the SCTR has now dropped to 19.2. There has definitely been some technical damage done here. The question now is can it reverse before we reach a sell signal???
I Fund: This is the only one of our equity based funds that is still trading above it’s 50 EMA. The SCTR remains a respectable 77.3. There is no reason to consider selling this one just yet.
F Fund: The recent buy signal in Bonds (The F Fund) proved to be prophetic as it telegraphed the selloff in stocks.
I know many of you are anxious. However, panic is not a strategy. You must be disciplined in the face of a sell off that could turn into a full blown correction and not sell until your charts tell you to sell. Of course that could come sooner if you are not in the I Fund with us. Just watch the signals on this blog or make your own decision after studying the chart or charts of the fund or funds that your invested in. Always have a contingency plan and stick to it. Selloffs will always be a part of the market. Also, never forget to trust in God. He has clearly demonstrated to this group on many occasions that He is with us if we will just put our trust in Him and lean not on our own understanding. That’s all for tonight.
