Good Evening, Negative sentiment in the financial sector weighted the market down keeping it slightly in the red for most of the day. The problem was that the bond yield curve continued it’s recent downward trend which narrows the profit margin for banks. The Dow however was able to close up and post a new record which as usual the media focused on. Also as usual the Dow didn’t tell the true story of the markets climate. Breadth was thin as declining issues outnumbered advancing ones on the NYSE by a 1.39-to-1 ratio; on Nasdaq, a 2.50-to-1 ratio favored decliners. The only way to make money today was to pick some really good stocks and it seemed like the pot of good ones was dwindling.
The days trading left us with the following results: Our TSP allotment gave up -0.85% as small caps were hammered with the Russell 2000 dropping a whopping -1.20%. For comparison, The Dow gained +0.04%, the Nasdaq lost -0.27% and the S&P 500 slipped back -0.02%. It was definitely not a good day for the average small cap stock. This is odd trading for November with small caps dropping and bond yields rising. Normally I would say that is a recipe for a nice pullback. However given the season I’m really not sure what to think. We’ll have to take a close look at the charts tonight.
The days action left us with the following signals: C-Neutral, S-Neutral, I-Neutral, F-Neutral. We are currently invested at 100/S. Our allocation is now +15.68% on the year not including the days action. Here are the latest posted results:
| 11/06/17 |
|
|
|
Prior Prices |
| Fund |
G Fund |
F Fund |
C Fund |
S Fund |
I Fund |
| Price |
15.4852 |
18.0999 |
36.3238 |
46.9565 |
30.1221 |
| $ Change |
0.0031 |
0.0229 |
0.0495 |
0.1380 |
-0.0230 |
| % Change day |
+0.02% |
+0.13% |
+0.14% |
+0.29% |
-0.08% |
| % Change week |
+0.02% |
+0.13% |
+0.14% |
+0.29% |
-0.08% |
| % Change month |
+0.04% |
+0.28% |
+0.64% |
+0.17% |
+0.24% |
| % Change year |
+1.96% |
+3.73% |
+17.66% |
+14.54% |
+22.44% |
| |
L INC |
L 2020 |
L 2030 |
L 2040 |
L 2050 |
| Price |
19.376 |
26.5288 |
30.114 |
32.7014 |
18.8943 |
| $ Change |
0.0080 |
0.0144 |
0.0225 |
0.0276 |
0.0175 |
| % Change day |
+0.04% |
+0.05% |
+0.07% |
+0.08% |
+0.09% |
| % Change week |
+0.04% |
+0.05% |
+0.07% |
+0.08% |
+0.09% |
| % Change month |
+0.14% |
+0.21% |
+0.31% |
+0.35% |
+0.38% |
| % Change year |
+5.25% |
+8.38% |
+12.22% |
+14.06% |
+15.73% |
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: The I Fund whipsawed back to Neutral when the MACD reversed yesterdays course and moved back into a negative configuration.
F Fund: Price broke the the upper trend line of the current ascending channel. The price of bonds is moving up as the yield curves move down. Are traders seeking safe havens?
No doubt about it, there are area’s of concern tonight. First, small caps are under performing and got hammered today. Second, large caps are out performing. Third,bond prices are rising. Folks, this is pretty much a recipe for a pull back. Normally, I would say it’s game on for a pullback. My level of caution is definitely raised. That said, I am not totally sold just yet. It’s November and the earnings have been pretty good. While not exactly lively the current climate on capitol hill favors business. So whats up? My best guess would be a mild pullback with a resumption of the bull market moving into the new year. Our job right now is to watch the chart for the S Fund carefully. Right now it’s had some pressure but it is still trading above it’s 20 EMA and it’s still in a bullish wedge pattern. So is this the fake out before a break out? That is possible. Three things we really need to watch on the chart are these #1 We need to make sure the lower trend line is not broken. #2 We need to keep an eye on the Price. As long as it remains above the 50 EMA we’ll be fine. #3 We need to keep an eye on the SCTR. If it drops below 40 that is reason for concern. So we must look not just at one thing but at the chart as a whole. Secondly, we need to keep and eye on the C Fund. If it should fail then we are probably in for a correction. Lastly, we need to watch bonds. If the price continues to rise then that’s a signal that money is moving out of stocks and into Safe Haven bonds. In conclusion, you have to look at the whole picture not just one thing. When several things start pointing in the same direction then it’s a pretty good bet that is where we are going. Clear as mud right?? Also, don’t forget the most important thing. Keep praying! God has always had His hand on this group and I think it’s because most of us have been faithful in seeking His guidance. That’s all for tonight! Have a nice evening and I’ll see you tomorrow.
God bless, Scott 
***Just a reminder that you can review the performance of our allocation at the Web Site TSPTALK.com in the autotracker section under the screen name KyFan1.
I produce and publish this blog as both a ministry and for the benefit of any Federal Government Employee. This is done to offer you some guidance as to how to approach your retirement more financially successful. When it is time for you to retire, I recommend you utilize the services of a Professional Money Manager, who works with a reputable investment firm. He understands the guidance you have already received and he can manage your savings assets utilizing a more advanced investment program into the future.
If you would like to receive more information about this introduction, please feel free to contact me at [email protected].
