Blog

02/03/14

Good Evening,

The correction goes on in a mighty way. Thank God that again we are in the right place!

 

Dow tumbles 326 points on weak data

 

 

The days selling left us with the following signals: C-Sell, S-Sell, I-Sell, F-Buy. Our current allocation is 10/G, 90/F. We are off -2.71% on the year so far. Here are the latest posted results:
01/31/14 Prior Prices
Fund G Fund F Fund C Fund S Fund I Fund
Price 14.3173 15.9903 23.0515 33.0278 24.5333
$ Change 0.0010 0.0177 -0.1493 -0.1756 -0.1277
% Change day +0.01% +0.11% -0.64% -0.53% -0.52%
% Change week +0.05% +0.30% -0.41% -0.30% -1.34%
% Change month +0.21% +1.58% -3.45% -1.91% -4.03%
% Change year +0.21% +1.58% -3.45% -1.91% -4.03%
  L INC L 2020 L 2030 L 2040 L 2050
Price 16.7453 21.4534 22.981 24.2512 13.6826
$ Change -0.0182 -0.0639 -0.0876 -0.1063 -0.0679
% Change day -0.11% -0.30% -0.38% -0.44% -0.49%
% Change week -0.07% -0.31% -0.40% -0.46% -0.54%
% Change month -0.42% -1.57% -2.04% -2.35% -2.71%
% Change year -0.42% -1.57% -2.04% -2.35% -2.71%

According to Friday’s chart, the reverse flag is now in play. The target will be a market drop the length of the flag staff which should put us at around 1700 for the S&P 500. Once that pattern has executed, we’ll look for the next thing coming on the charts. I don’t even want to speculate at this time what that might be. Here’s what Carl Swenlin has to say about it:
Looking at the last five daily bars on the thumbnail chart, we can see that it has been a rocky week; however, a trading range was maintained. That’s the good news. The bad news is that it looks as if we have a reverse flag in progress, and that is a bearish pattern.
Conclusion:  Yesterday it appeared that the SPX was launching into another rally, but today it got smacked down. Whereas I had settled on two possible bullish outcomes, I now see a third possibility, but it is bearish. Still, the market maintains the ability to rebound from intraday oversold levels, a fact that is the bane of the short sellers.

If I am correct, our current allocation will look real good when this correction is over. You must have patience when you are dealing with a market like this one. Remember, it’s not what you make, it’s what you keep! The trader with the most patience will come out with the best return in the end. Buying and holding has worked for the past two years, but as I have been saying, 2014 is a bird of a different color. Those of you that have found it so easy to set it and forget it the past 2 years will find a difficult road to travel this year. Those of you that have been with me from the beginning won’t have any problem dealing with it. We have seen this before. It’s a normal market and normal rules apply. That’s all for tonight. May God continue to bless your trades. Have a nice evening!
God bless,
Scott8-)

 

Interfund transfer question

Hello Everybody,

I just wanted to pass along to you a question that was sent to me from one of our members. The question is “Should I do and interfund transfer to match the allocation from my check when you post a new allocation?” This topic often confuses people, so I will send it out to everyone just in case you are confused as well. Remember, there is no question that is a stupid question when it comes to your money!  Here is the my answer to the question:

The term allocation is literal. We are speaking of the allocation (or percentage of money) that you have invested in each of the various funds, not the money that you have deposited into Thrift from your check. The money that you have withdrawn from your check should always be 100/G. That prevents you from losing a deposit that’s made into TSP that occurs on a bad day for the market. The money that comes out of your check that goes into the G Fund will automatically be picked up when you do your next interfund transfer. It is better to let it set idle for a short amount of time than to risk losing it on the day that it is put into Thrift. It is very dangerous to have the money that is withdrawn from your check deposited directly into an equity based fund. Of course, that means putting it into the C, S, or I Funds. It should also be noted that there is a certain amount of risk incurred as well when you deposit the money directly into the F Fund (Bonds). You are correct in that you should do an interfund transfer to reflect our current investment/allocation of 10/G, 90/F.  
Have a great day!
Scott8-)

 

Good Info. on Where We’re Heading

COMBINING THE JANUARY BAROMETER AND MIDTERM ELECTION YEARS

My December 14 message included the headline: ‘The Four-Year Presidential Cycle Suggests that 2014 Could Suffer A Major Downside Correction”. That message also suggested that two of the best months to take some profits were during January and April. [I further suggested that a major correction was more likely to take place between May and October, which could lead to a major buying opportunity during the fourth quarter of the year]. The fact that January turned out to be a down month makes that warning for a volatile year more likely. With the Dow down -5.3% for the month, and the S&P 500 losing -3.6%, the January Barometer has issued a negative warning. The January Barometer is based on the belief that “as January goes, so goes the year”. The January Barometer is backed up by market history. Credit for its discovery goes to Yale Hirsch who first wrote about it in the Stock Traders Almanac in 1972. According to the Almanac, the January Barometer has predicted the year’s stock market direction 76% of the time since 1950. It goes on further to state that “every down January in the S&P since 1950, without exception, preceded a new or extended bear market, a flat market, or a 10% correction” (Stock Traders Almanac 2014, p. 12). It goes on further to state that 10 of the last 16 midterm elections years followed January’s direction. The fact that the Barometer turned negative during 2014 (a midterm election year) raises the odds for a more volatile year for stocks. The good news is that midterm election years usually finish the year stronger than they start.

01/31/14

Good Evening,

We had more selling today. The charts indicated that there would be more selling and the day’s trading fulfilled their predication. Actually, when looking at it just from today’s aspect, I’m not surprised that the traders sold into the close due to the specter of more bad news possibly coming from the emerging markets over the weekend. After hours trading can be brutal when there is bad news and there is absolutely nothing you can do about it until the market opens on the next trading day. By then the losses can be deep. Since the great majority of traders do not have access to after hours trading, they sell when the risk of bad news during non-trading hours is high. The dip buyers did show up today and drove the markets higher until they sold off at the close for the aforementioned reason. That shows that there is still a large number of traders that think they can make money. They are not willing to hold stocks after hours at this time and neither am I…

 

Stocks fall, end worst January in years

 

 

The week’s trading left us with the following signals: C-Sell, S-Neutral, I-Sell, and F-Buy. Or current allocation is 10/G, 90/F. It is -2.81% so far in 2014. While that didn’t set the world on fire in January it did beat both the Dow and S&P 500 for the month. The Dow was off over 5% and the S&P more than 3%. Here are the latest posted results: 
01/30/14
Fund G Fund F Fund C Fund S Fund I Fund
Price 14.3163 15.9726 23.2008 33.2034 24.661
$ Change 0.0009 -0.0138 0.2590 0.4801 -0.0416
% Change day +0.01% -0.09% +1.13% +1.47% -0.17%
% Change week +0.04% +0.19% +0.24% +0.23% -0.83%
% Change month +0.21% +1.47% -2.82% -1.39% -3.53%
% Change year +0.21% +1.47% -2.82% -1.39% -3.53%
  L INC L 2020 L 2030 L 2040 L 2050
Price 16.7635 21.5173 23.0686 24.3575 13.7505
$ Change 0.0284 0.0879 0.1227 0.1522 0.0951
% Change day +0.17% +0.41% +0.53% +0.63% +0.70%
% Change week +0.04% -0.01% -0.02% -0.03% -0.05%
% Change month -0.32% -1.28% -1.66% -1.92% -2.22%
% Change year -0.32% -1.28% -1.66% -1.92% -2.22%
After reviewing the charts, there are two scenarios that can take place from this point forward: 
Yesterday a short-term bottom was formed as price broke out above a very steep down trend. With this new bottom in place, we can draw a new rising trend line, which coincidentally is parallel with the rising tops line that was part of the rising wedge. This forms a rising trend channel, which helps us estimate upside targets, assuming that price is able to reach the top of the channel.
“The rising wedge formation certainly fulfilled the expectation that it would break down. The steepest side of the wedge usually is the least sustainable, and when price breaks down, it allows a less accelerated (and more sustainable) rising trend to be established.
So the head and shoulders is still a viable scenario, but the rising trend channel is now a more bullish possibility.
Conclusion:  My expectation is for the market to move higher. The options: (1) right shoulder forms lower top, or (2) move to new all-time highs within the rising trend channel. The indicators will support either outcome.”
The chart is courtesy of Decision Point.com and the analysis is by Carl Swenlin. While I have access to charts, I do not currently have the ability to diagram them and it is hard as heck to explain what’s going on without it so I use Carl’s charts when they agree with my analysis. I must add though, that Carl Swenlin is one of the fathers of technical analysis and very much more qualified than myself to do the analysis. I want to make sure he gets the credit for his work. Should you choose to do so you can gain access to his web site for around $20.00 per month. Well worth the price. Anyway, as he noted the Head and Shoulders pattern is still in play. It can be frustrating, but these things just have to play out in order for us to know with some certainty which direction the market is heading. Viewing the possibilities now allow us to make contingency plans for each outcome and shows us which charts in particular to focus on.  That’s enough for tonight. Clear as mud, right? Actually, it is quite clear and if you don’t know how to follow the charts just yet just keep paying attention and you’ll learn to recognize every thing that we’re talking about in short order. All that said, I would be amiss not to say that the Lord is my safety net so I don’t really worry about what might happen. I just trust Him to watch over me. He has never let me down and I mean not even once. And yes or course, I mean in trading stocks! May He continue to bless your trades. Have a great weekend. 
                                                                                                                                       God bless, Scott8-)

 

01/30/14

Good Evening,

This type of market is definitely not any fun to trade. It went back up today on decent news, but is it playing out the head and shoulders scenario that we have been tracking on our charts?

 

Stocks bounce back as earnings impress

 

The day’s action left us with the following signals: C-Sell, S-Neutral, I-Sell, F-Buy. Our current allocation is 10/G, 90/F. It is -2.74% so far on the year. Here are the latest posted results:

01/29/14
Fund G Fund F Fund C Fund S Fund I Fund
Price 14.3154 15.9864 22.9418 32.7233 24.7026
$ Change 0.0010 0.0471 -0.2340 -0.3819 -0.1341
% Change day +0.01% +0.30% -1.01% -1.15% -0.54%
% Change week +0.03% +0.28% -0.88% -1.22% -0.66%
% Change month +0.20% +1.56% -3.91% -2.81% -3.37%
% Change year +0.20% +1.56% -3.91% -2.81% -3.37%
  L INC L 2020 L 2030 L 2040 L 2050
Price 16.7351 21.4294 22.9459 24.2053 13.6554
$ Change -0.0270 -0.0956 -0.1326 -0.1628 -0.1038
% Change day -0.16% -0.44% -0.57% -0.67% -0.75%
% Change week -0.13% -0.42% -0.55% -0.65% -0.74%
% Change month -0.48% -1.68% -2.19% -2.53% -2.90%
% Change year -0.48% -1.68% -2.19% -2.53% -2.90%
With today’s gains (not shown) the head and shoulders pattern we have been tracking is alive and well:
Yesterday’s SPX closed below the support line drawn from the May top, but it remained above the line drawn from the December low.
Today’s gains could be the initiation of the right shoulder of the pattern. Should the right shoulder form and the pattern execute, the chart will break below the neckline. I would target the next level of support at around 1,700. That is the reason I’m not very bullish at this time. Also, let’s include the intangibles. This market just does not feel like it did for the past two years. It has been wrong not to be bullish after a day like this even if the charts were technically broken. My feeling is that today’s advance was little more than an oversold bounce and we are not going to continue up as easily as we did during the past 24 months. This market is not the one for blind bullishness. It’s true, the FED is still purchasing bonds, but those purchases have been reduced by 20 billion per month so any advantage that they have created is starting to diminish.  Things are different now than they have been in the recent past and we must treat them differently. Am I sounding the alarm? Maybe. With an extended market and an ominous pattern forming on the charts, I will be real surprised if yesterday’s pull back was the end of the selling. We must keep praying that God will continue to guide our group. This is a difficult market right now. It is a market that appears to be in transition. How long will that transition last? If you know the answer to that question you can go on CNN and talk about it. After all, everyone else is and I will put my trust in none of them. I will continue to depend on the God that built my portfolio in the first place. Give Him the praise!!!  For now, I will continue to play defense until the charts indicate that this down turn is truly over. Have a great evening!
God bless,
Scott 8-)

 

01/29/14

Good Evening,

Our move to a defensive stance has served us well…

 

Stocks sink on Fed, emerging market fears

 

The day’s selling left us with the following signals: C-Sell, S-Sell, I-Sell, and F-Buy. Our current allocation is 10/G,  90/F. It’s
performance is -3.00% in 2014. Here are the latest posted results: 
01/28/14
Fund G Fund F Fund C Fund S Fund I Fund
Price 14.3144 15.9393 23.1758 33.1052 24.8367
$ Change 0.0010 0.0185 0.1418 0.3504 0.0360
% Change day +0.01% +0.12% +0.62% +1.07% +0.15%
% Change week +0.03% -0.02% +0.13% -0.07% -0.12%
% Change month +0.19% +1.26% -2.93% -1.68% -2.85%
% Change year +0.19% +1.26% -2.93% -1.68% -2.85%
  L INC L 2020 L 2030 L 2040 L 2050
Price 16.7621 21.525 23.0785 24.3681 13.7592
$ Change 0.0209 0.0638 0.0887 0.1101 0.0692
% Change day +0.12% +0.30% +0.39% +0.45% +0.51%
% Change week +0.03% +0.02% +0.02% +0.02% +0.01%
% Change month -0.32% -1.24% -1.62% -1.88% -2.16%
% Change year -0.32% -1.24% -1.62% -1.88% -2.16%
Here is the latest on the charts from Carl Swenlin: His analysis is rock solid…
There was a small oversold bounce today, which I interpret as being the beginning of a right shoulder. Please understand that I see the head and shoulders outcome as a strong possibility, but it is not a prediction, per se. A lot can happen between now and the completion of the right shoulder, and I am prepared to abandon this assessment with no regrets, but it has merit at this point.
Intermediate-Term Indicators:  Not nearly oversold enough historically, but they are oversold relative to the indicator range in the last six months.
Conclusion:  While I would welcome a continuation of the correction (we really need to flush some of the excess out of the system), the indicators are poised to support another rally. This fits nicely with my head and shoulders scenario, but it could be more robust than that; however, if the market bias has truly turned bearish, the indicators can also accommodate a break down through support, that would be a whole new ball game. The Fed comments tomorrow could kick it either way.
* * * * * * * * * * * * * * * * * * * * *
Of course, the Fed comments did kick the market….down the steps….and we were ready for it. Currently our equity based charts are all showing sell signals and our defensive funds (the G and F funds) have green lights. Our allocation is down a few points so far this year, but our main focus in a market like this is to preserve our capital. If the selling goes deep enough it should present us with another excellent opportunity to produce some gains. That’s all for tonight. May God continue to bless your trades.
 Scott8-)

 

01/28/14

Good Evening,

We got the bounce today that we expected yesterday and that was good. However, we have a pattern developing on our major charts that would indicate that more selling is on the not too distant horizon, but we will deal with that after we go over today’s action.

 

Dow snaps five day losing streak

 

 

The day’s trading left us with the following signals: C-Sell, S-Neutral, I-Sell, and F-Buy. Our current allocation is 10/G, 90/F. It is off -3.10% for 2014. Here are the latest posted results: 
01/27/14
Fund G Fund F Fund C Fund S Fund I Fund
Price 14.3134 15.9208 23.034 32.7548 24.8007
$ Change 0.0030 -0.0217 -0.1117 -0.3721 -0.0659
% Change day +0.02% -0.14% -0.48% -1.12% -0.26%
% Change week +0.02% -0.14% -0.48% -1.12% -0.26%
% Change month +0.18% +1.14% -3.52% -2.72% -2.99%
% Change year +0.18% +1.14% -3.52% -2.72% -2.99%
  L INC L 2020 L 2030 L 2040 L 2050
Price 16.7412 21.4612 22.9898 24.258 13.69
$ Change -0.0160 -0.0585 -0.0837 -0.1057 -0.0673
% Change day -0.10% -0.27% -0.36% -0.43% -0.49%
% Change week -0.10% -0.27% -0.36% -0.43% -0.49%
% Change month -0.45% -1.53% -2.00% -2.32% -2.66%
% Change year -0.45% -1.53% -2.00% -2.32% -2.66%
Now about those charts…. Why would I go defensive when I am expecting a bounce? This is why. We’ve been discussing the head and shoulders pattern that has been developing on the charts of the major indices. For the purpose of this discussion we will use the S&P 500 as it is the most representative of the market as a whole. Some say the Dow, but I disagree. Also, I prefer the S&P 500 chart as it also represents our C-Fund. Here is the latest chart that tells the story:
The support line drawn from the May top was penetrated yesterday, but price managed to close right on it. Because it is such a persistent line of support and resistance, I am using that line as the neckline of the head and shoulders pattern that seems to be developing; however, the horizontal line drawn from the December low is also a potential support line/neckline. First prices need to stop falling.
Intermediate-Term Indicators:  Falling into the neutral zone, but they have the potential to go much lower.
Conclusion:  For a while it looked as if the market was putting in a short-term bottom, but, since price closed in the bottom half of the day’s trading range, I’m not so sure that the selling is done. There is still the potential for a bounce, but intermediate-term indicators imply that this correction has farther to go.
So that’s it in a nutshell. If this pattern executes, we will get a bounce the could last a few days or even weeks followed by a correction that would most likely find support in the 1700 area. So our plan is to play defense until #1 The pattern executes and the correction is over or #2 The pattern fails to execute and the market heads aimlessly higher. I bet against this pattern on a few occasions when I was learning technical analysis and it did not come out well. I have learned to respect it. It normally executes over 80% of the time in case you want to know the odds, so make your decisions carefully. That’s all for tonight. May God continue to bless your trades. Have a nice evening.
God bless,
Scott8-)

 

01/27/14

Good Evening,

Today was a day when nothing worked. Stocks were down, corporate bonds were down, treasuries were down, gold got chewed up and silver was a disaster. The only things that didn’t go down (only because they can’t) were the G-Fund and cash. We are definitely in a down trend. We may get a little reprieve, but we will probably head down for a real correction of 10% or more after that. We’ll talk about that with some charts a little later…

 

Stocks tumble as global jitters persist

 

 

The day’s selling left us with the following signals: C-Sell, S-Sell, I-Sell, and F-Buy. Our new allocation is 10/G, 90/F. It is off -2.30% after the recent selling. 

01/24/14 Prior Prices
Fund G Fund F Fund C Fund S Fund I Fund
Price 14.3104 15.9425 23.1457 33.1269 24.8666
$ Change 0.0010 0.0178 -0.4938 -0.8486 -0.7109
% Change day +0.01% +0.11% -2.09% -2.50% -2.78%
% Change week +0.05% +0.33% -2.62% -2.29% -2.93%
% Change month +0.16% +1.28% -3.06% -1.61% -2.73%
% Change year +0.16% +1.28% -3.06% -1.61% -2.73%
  L INC L 2020 L 2030 L 2040 L 2050
Price 16.7572 21.5197 23.0735 24.3637 13.7573
$ Change -0.0758 -0.2656 -0.3654 -0.4464 -0.2873
% Change day -0.45% -1.22% -1.56% -1.80% -2.05%
% Change week -0.47% -1.34% -1.72% -1.98% -2.25%
% Change month -0.35% -1.27% -1.64% -1.89% -2.18%
% Change year -0.35% -1.27% -1.64% -1.89% -2.18%
So what’s really going on? This is from Decision Point.com which is totally accurate and agrees 100% with my analysis.
The head and shoulders pattern is frequently how a price index puts in a top, and, while it may be a bit early to start talking about it, it is one possible scenario that we can anticipate.  A few weeks ago we identified a rising wedge pattern, which believed would resolve downward because that is what that pattern usually does. The expected breakdown happened today, and now we look for signs of what may happen next.
There is a line of support drawn from the May 2013 top that has a lot of credibility because it engages three tops and two bottoms. That line is the most obvious place for prices to find at least temporary support, even if prices are destined to move lower. We can see that a left shoulder and head have already been formed, and if prices bounce off that support line (which is also the neckline), there is a good chance that a right shoulder will be formed.
For the formation to be somewhat symmetrical the bounce would have to be fairly shallow and with a duration of several weeks. If the head and shoulders breaks down after the right shoulder has formed, the minimum downside target would be about 1700. As I said, this is only one possible scenario, but things are pretty well aligned for that outcome. But first things first. Let’s see if there is a bounce next week.
That was posted Friday night. Of course, as we all know now, there was no bounce today. I do expect that there will be a small surge to complete the right shoulder so we will be careful not to get trapped. Either way I think we are correcting and I will not go back into equities until I have solid buy signals and room to run. Capital preservation is our number one concern at this time. We made some money during the past 12 months and we must not lose it. Don’t forget to pray for our group! May God continue to bless your trades.
See you tomorrow.
Scott8-)

 

01/24/14

Good Evening, 

Ouch, that hurt! I knew it would, but that didn’t take much of the sting out of a big sell off. So, do we re-balance? Lets take a look at the news and charts and make a decision.

 

Dow suffers worst week since 2011

 

The day’s sell off left us with the following signals: C-Sell, S-Sell, I-Sell, F-Buy. Our current allocation is 64/S, 36/I, but in lieu of a possible correction I will re-balance tonight. Remember, it’s not what you make it’s what you keep. It’s possible that we could get left in the dust, but this market does not look or act like it did in 2013 so we will take no chances. I’ll send out an E-Mail as soon as I have all the data and the charts to re-balance…. Here are the latest results:
01/23/14
Fund G Fund F Fund C Fund S Fund I Fund
Price 14.3094 15.9247 23.6395 33.9755 25.5775
$ Change 0.0009 0.0566 -0.2114 -0.2648 -0.0942
% Change day +0.01% +0.36% -0.89% -0.77% -0.37%
% Change week +0.04% +0.22% -0.54% +0.22% -0.16%
% Change month +0.16% +1.16% -0.99% +0.91% +0.05%
% Change year +0.16% +1.16% -0.99% +0.91% +0.05%
  L INC L 2020 L 2030 L 2040 L 2050
Price 16.833 21.7853 23.4389 24.8101 14.0446
$ Change -0.0205 -0.0753 -0.1047 -0.1282 -0.0821
% Change day -0.12% -0.34% -0.44% -0.51% -0.58%
% Change week -0.02% -0.12% -0.16% -0.18% -0.21%
% Change month +0.10% -0.05% -0.09% -0.10% -0.13%
% Change year +0.10% -0.05% -0.09% -0.10% -0.13%
Actually, while there was some damage to the charts it’s not as bad as we might have thought.

I-Fund: Now that was ugly to be sure….
And the F Fund: Bonds where definitely the best bet today. It’s easy to see where this one is generating a solid buy signal.
So how deep will the market correct? I’m not even going to take a guess, but my charts tell me there will likely be more. Monday could be interesting, if the market goes like last year we will bounce back with a vengeance. I think a bounce is likely on Monday, but my guess is that it will be a dead cat bounce. A trap for the bulls. I haven’t felt comfortable with this market since the first of the year and think that now is the time to be cautious until this uncertainty is over. A correction by definition is one that is 10% or more. A good correction would benefit us at this time by creating more room for the bulls to run on the other side so lets get it over with and the deeper the better! We will play defense and return to equities when our charts improve. We still have most of our earnings from 2013 in tact and we will keep them that way! Pray for our group and God will bring us through this year with a profit as He almost always has. Just a note for those of you considering retirement: It is frustrating for me to watch those of you that are still navigating TSP on a day like today. You have no choice, but to wait a day or a day and a half to move your money to safe havens. I was able to move all the funds to safe havens in our Thrift style fund AMP as soon as the sell off started this morning. Not only were we able to avert most of the losses, but we were actually able to turn things around and make a little money today as we have some great defensive funds available when the time to play defense comes. You just can’t protect your gains as well as you need to in TSP. Just food for though and yes of course, I can assist you if you need it. However, the important thing is to protect your capital somewhere. It most assuredly does not have to be with me ( : . That’s all for tonight. I will put out a message shortly with the new allocation. May God continue to bless your trades! Have a great weekend and stay warm. Even you folks in Florida…
God bless,
Scott8-)

 

01/23/14

Good Evening,

It’s frustrating to trade this market so far in 2014. With the market on its side, it neither gives nor takes. It’s impossible to be positioned for a rally or for defense because this market is constantly changing directions. One day, it’s best to be in equities and the next, bonds or cash. We correctly predicted this behavior several weeks ago. The problem, which is easily evident when you study the charts, is that there is not enough trading data one way or the other to establish a trend in either direction. A lot of factors favor a correction , but then again they have favored a correction for the past 24 months! So it is not so easy to say that you should be defensive or that you should be in the market. To do so is virtually a crap shoot in either direction. To put it in simpler terms, it’s a risk to commit in either direction. As some of you are all too aware, you can lose money in bonds just as well as you can lose it in stocks. So where do we go from here? Ultimately, this market will resolve one way or the other. We must watch the charts closely and jump on the new trend in whatever direction it may go as soon as we can in fact observe an established trend. Until then, we must suffer through more of the same conditions that we are seeing today. Yes, we could sit in cash, but then again we didn’t make over 35% sitting in cash and waiting for a correction last year did we? No, we must be patient and realize that we are playing with house money… and never forget…God is still on the throne!

Stocks drop as investors sweat earnings

 

The day’s action left us with the following signals: C-Neutral, S-Buy, I-Buy, F-Buy. Our current allocation is 64/S, 36/I. It has gained +0.94% so far in 2014. We should stay in positive territory after today’s selling, but barely… Here are the latest posted results: 
01/22/14
Fund G Fund F Fund C Fund S Fund I Fund
Price 14.3085 15.8681 23.8509 34.2403 25.6717
$ Change 0.0010 -0.0297 0.0167 0.1787 0.0658
% Change day +0.01% -0.19% +0.07% +0.52% +0.26%
% Change week +0.03% -0.13% +0.35% +1.00% +0.21%
% Change month +0.15% +0.80% -0.10% +1.69% +0.42%
% Change year +0.15% +0.80% -0.10% +1.69% +0.42%
  L INC L 2020 L 2030 L 2040 L 2050
Price 16.8535 21.8606 23.5436 24.9383 14.1267
$ Change 0.0052 0.0206 0.0298 0.0379 0.0247
% Change day +0.03% +0.09% +0.13% +0.15% +0.18%
% Change week +0.10% +0.22% +0.28% +0.34% +0.37%
% Change month +0.22% +0.30% +0.36% +0.42% +0.45%
% Change year +0.22% +0.30% +0.36% +0.42% +0.45%
We were starting to make some headway, but we got knocked down again with today’s selling. That could all change tomorrow with the positive earnings report from Microsoft after the bell. We’ll see… Here’s what’s going on with the charts. Taking a good look at yesterday’s results: 
“The SPX has been bouncing along under overhead resistance for about three weeks.
Zooming in for a closer look we can see the rising wedge pattern, which will probably resolve downward; however, we can also see a significant line of short-term resistance that combines with the rising trend line to form a triangle. The flat side of the triangle is considered to be the weakest side, so it is possible we are going to see a breakout above that line. If that happens, the top of the wedge comes into play as the next line of resistance.”
Most of the analysis is courtesy of Decision Point.Com. Carl Swenlin, who runs the paid site, is one of the fathers of technical analysis, which of course is our investment style. This pattern will probably resolve downward, but how much will it gain before it does and when will that take place? Right now we have buy signals in the S and I Funds where we are invested. We will stay put until those charts tell us otherwise. No doubt, bonds are looking better, but that can turn on a dime if the FED Tapers QE III very much. After all, what has the FED been buying but bonds? I’m looking for some kind of bounce tomorrow. We’ll see what happens and go form there. God bless and have a great evening!
Scott8-)