Good Evening, The market finally had a notable dip today as lower oil prices invited some profit taking after a very nice run. Most of the investors that I’m in contact with are glad to see the pull back and consider it a buying opportunity. Worth noting is the fact that there is still a lot of money flowing into the market from hedge funds and retirement accounts. For all you serial top callers out there I would say that topping is a process. Markets don’t just crash in one day. If they do you have a lot more to worry about than stocks to be sure. Also related to the topping subject is a current Bank of America and Merrill Lynch survey that indicates that the bull market will go into 2019. Here is part of what The Street published about it today:
“Global investors have upped their equity market bets and reduced the amount of cash they’ve kept on the sidelines, according to according to this month’s benchmark survey from Bank of America Merrill Lynch.
On the other hand, hedge funds increased their exposure to stocks to the highest levels in more than a decade.
Equity market allocations for global fund managers rose to a two-year, the BAML’s January survey indicated, with a 55% “net overweight” reported by the 183 men and women in the survey controlled more than half a trillion dollars in global investments, who don’t expect the current bull market to peak until “2019 or beyond”. Net hedge fund equity market exposure also increased, BAML said, rising nine percentage points to a net 49%, the highest level since 2006,.
“Investors continue to favor equities,” said BAML’s chief investment strategist Michael Hartnett. “By the end of Q1, we expect peak positioning to combine with peak profits and policy to create a spike in volatility.”
Investors were also the most bullish they’ve been on corporate earnings since 2011, with a net 15% saying they see global bottom line growth topping 10% this year and more than half forecasting capital spending increases.”
Folks, there are many bears out there that have valid arguments as to why this market will fail soon. The problem is that these are many of the same arguments they have used for several years now. Had we listened to them we would have been in cash a long time ago. I have written extensively about my investment philosophy so I won’t repeat that here. I will add an analogy that kind of sums up what we do. We use our charts to ride the current trend and that is a lot like a surfer catching a big wave. He catches a big wave and rides it until it ends or until he falls. He doesn’t just decide to bail out because he is afraid the wave will end. That’s just not how you surf and it’s sure not how we invest either!
I have seen nothing to indicate to me that this wave is over! If you keep an eye on your charts you will know when it is over and when you should move.
The days trading left us with the following results: Our TSP allotment dropped -1.07%. For comparison, the Dow slipped -0.04%, the Nasdaq -0.51%, and the S&P 500 -0.35%. It was a tough day for the smaller cap stocks but that is just what they do on down days so there is really no concern as long as the market is trending up. As usual. we’ll take a close look at the the S Fund chart below.
The days action left us with the following signals: C-Buy, S-Buy, I-Buy, F-Sell. We are currently invested at 100/S. Our allocation is now +3.58% on the year not including the days results. Here are the latest posted results:
| 01/12/18 | Prior Prices | ||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 15.5527 | 18.0266 | 39.2202 | 50.2031 | 32.1638 |
| $ Change | 0.0010 | -0.0044 | 0.2630 | 0.1452 | 0.3743 |
| % Change day | +0.01% | -0.02% | +0.68% | +0.29% | +1.18% |
| % Change week | +0.05% | -0.18% | +1.61% | +1.85% | +1.76% |
| % Change month | +0.08% | -0.49% | +4.28% | +3.58% | +4.24% |
| % Change year | +0.08% | -0.49% | +4.28% | +3.58% | +4.24% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 19.7174 | 27.2852 | 31.5137 | 34.4779 | 20.0551 |
| $ Change | 0.0311 | 0.0741 | 0.1474 | 0.1894 | 0.1245 |
| % Change day | +0.16% | +0.27% | +0.47% | +0.55% | +0.62% |
| % Change week | +0.36% | +0.61% | +1.04% | +1.22% | +1.39% |
| % Change month | +0.85% | +1.47% | +2.53% | +2.98% | +3.39% |
| % Change year | +0.85% | +1.47% | +2.53% | +2.98% | +3.39% |
