Good Evening, Volatility continued today after the Chinese announced Tariffs on approximately 50 Billion Dollars in US Goods in response to earlier US Tariffs on Chinese goods. It looked like stocks were going to end the day deeply in the red until a dramatic reversal occurred in the afternoon session. The reversal came after the Presidents Chief Financial Adviser Larry Kudlow was quoted as saying that we were not in a trade war but rather negotiations and that backdoor talks with China were already under way. The US tariffs are not scheduled to take place for six months and the Chinese tariffs are not scheduled to take effect until the US tariffs become active. This reminds me of the market action that took place before the Fed enacted the first interest rate increase. Only with a lot more volatility. The market swung each time a piece of news or rumor came out concerning when the Fed might increase rates. As you will remember this up and down action occurred for several months. I’m afraid that’s the case for trade negotiations with China as well. For the next six months or so the market will swing on every price of news both real and fake concerning trade negotiations. If a report says the negotiations are going well the market will rally, if it says they are going poorly it will tank. Prepare your mindset for this. There are likely to be some big swings in both directions. However, I believe that one positive thing will be corporate earnings that continue to increase. Really the only two issues that can bring us down for the count are interest rates increasing more rapidly than anticipated and a real trade war with China. Putting up with the volatility they create will be the price of doing business. If you find yourselves uncomfortable with these conditions the best thing to do is to go 100/G. I’m going to bet my money that in the end these issues will not bring the market down…… Quite simply, you must be in it to win it!
The days roller coaster left us with the following results: Our TSP allotment made a nice gain of +1.11%. For comparison, the Dow added +0.96%, the Nasdaq +1.45%, and the S&P 500 +1.16%. Thank God for two good days in a row. I believe the last time that the S&P 500 went up two days straight was in early March!
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 -0.81% for the year. Here are the latest posted results.
| 04/04/18 | Prior Prices | ||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 15.6472 | 17.8193 | 37.3776 | 48.4759 | 30.364 |
| $ Change | 0.0012 | -0.0013 | 0.4305 | 0.5373 | 0.1546 |
| % Change day | +0.01% | -0.01% | +1.17% | +1.12% | +0.51% |
| % Change week | +0.03% | -0.18% | +0.16% | -0.09% | -0.52% |
| % Change month | +0.03% | -0.18% | +0.16% | -0.09% | -0.52% |
| % Change year | +0.69% | -1.63% | -0.62% | +0.02% | -1.59% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 19.612 | 26.9142 | 30.6494 | 33.3233 | 19.2781 |
| $ Change | 0.0390 | 0.0883 | 0.1800 | 0.2313 | 0.1518 |
| % Change day | +0.20% | +0.33% | +0.59% | +0.70% | +0.79% |
| % Change week | +0.00% | -0.05% | -0.06% | -0.07% | -0.09% |
| % Change month | +0.00% | -0.05% | -0.06% | -0.07% | -0.09% |
| % Change year | +0.31% | +0.09% | -0.28% | -0.46% | -0.61% |
