Good Evening, Today was a combination of consolidation after a nice run and concern over a possible government shutdown as the market took a rest. The result was a moderate decline on poor breadth. The underlying mood is still positive as a result of corporate tax reform and repatriation. It is the prevailing opinion that money flowing into corporate coffers will create value in stocks. You know what? I agree. During my daily review of the market I found an article by Decision Point that is of was of great interest to me. Why? Mostly because I agree with it. It is something that I have been thinking for a while but was unable to articulate. The article which follows is a theory that blows the boo birds that are preaching doom and gloom due to high stock prices right out of the water. I think it it is spot on. Here it is:
“As we watch the SPX continue to move higher in parabolic fashion, it’s of course natural to begin to worry about a market collapse. During today’s MarketWatchers LIVE show, Tom and I went over what we think are good “alerts” to the bear market switchover. However, Carl made a great point in Friday’s “Weekly Wrap” that we could be looking at a “new normal” as far as bull and bear markets are concerned.
Note the long-term monthly chart below. Monthly PMO SELL signals have worked quite well to warn of impending bear markets or corrections. When I talk about a “new normal”, the monthly chart already shows some moves to “new normals”. In the late 80’s/90’s where new all-time highs were set and the original ‘trading range’ of the SPX moved higher with looser fiscal policies and the “dot com” explosion. This could be what we’re looking at right now with the tinder being a more business-friendly environment based on corporate taxes and an expanding economy. So when I say, “new normal”, I’m talking about the establishment of a new very long-term trading range. Like the 90’s, we could be seeing a similar type of “travel time” which means few corrections and no serious bear markets. The monthly PMO does keep us fairly safe along the way.
Given that we could be looking at a travel period to a new trading range, the parabolic chart pattern may not be as much of a problem after all. The market has had periods of ‘rest’ during this rise and even a few small pullbacks. I suggest that this could continue for a few more years or so, but we will likely see some more serious downturns along the way as the market does get stretched thin. In the shorter term, I’m concerned about the very overbought PMO.”
Hopefully you all understood what they are saying. They being Carl and Erin Swenlin. It you didn’t focus again on the top chart. Carl is saying that we have entered a new trading zone, that these stock prices are the new normal which means two things #1 There is still room for this rally to go higher. #2 When we have the next bear market the price will drop in relation to the “new low” which at the top of the blue box. If you still don’t understand then just know this. If Carl is correct (and I believe he is) the market will move higher in 2018 and that is exactly what we have been saying on this blog. Don’t forget one thing though! We’ll always check our charts and react to what we see regardless of what we think!
The days trading left us with the following results: Our TSP allotment fell back -0.44%. For comparison, the Dow dropped -0.37%, the Nasdaq -0.03%, and the S&P -0.16%.
The days action left us with the following signals: C-Buy, S-Buy, I-Buy, F-Sell. We are currently invested at 100/S. However after reviewing the charts I have decided to move to 100/C. I don’t know why the chart is better but it is. In the even that it changes we always have another trade. We have been running the second or third best chart because it is supposed to get better. Well this is a classic reason why you listen to your chart and not your heart. Things don’t always go the way the are supposed to go but our charts never lie. As of the close of business tomorrow we will be 100% invested in the C Fund. So as soon as you finish reading this blog go to the Thrift site and put in an interfund transfer for 100/C if you are following our allocation.
Our allocation is now +3.43% on the year not including the days results. Here are the latest posted results:
| 01/17/18 | Prior Prices | ||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 15.5578 | 18.0058 | 39.4504 | 50.1303 | 32.2571 |
| $ Change | 0.0010 | -0.0314 | 0.3673 | 0.4163 | -0.0175 |
| % Change day | +0.01% | -0.17% | +0.94% | +0.84% | -0.05% |
| % Change week | +0.03% | -0.12% | +0.59% | -0.15% | +0.29% |
| % Change month | +0.11% | -0.60% | +4.89% | +3.43% | +4.54% |
| % Change year | +0.11% | -0.60% | +4.89% | +3.43% | +4.54% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 19.7364 | 27.3257 | 31.5889 | 34.5722 | 20.116 |
| $ Change | 0.0235 | 0.0575 | 0.1172 | 0.1518 | 0.1007 |
| % Change day | +0.12% | +0.21% | +0.37% | +0.44% | +0.50% |
| % Change week | +0.10% | +0.15% | +0.24% | +0.27% | +0.30% |
| % Change month | +0.95% | +1.62% | +2.77% | +3.27% | +3.71% |
| % Change year | +0.95% | +1.62% | +2.77% | +3.27% | +3.71% |
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:
We’re moving to the C. There’s nothing else to add here. Keep praying and God will keep guiding our hand! That’s all for tonight. Have a nice evening and stay warm!
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].
