Good Evening, Are we recovering? It looks possible that another V Shaped bounce could be coming late to the party which is not impossible as a lot of cheap FED money is still floating around. However, the market does have considerable headwinds this time around given the poor economic situation in Europe. At this point, we must watch the action with skepticism and listen only to our charts and not our hearts. While the action thus far is encouraging and falls within our expectations, we must be careful not to fall into a bull trap. Remember, it was a statement by a FED member that got this started and another small news item could easily reverse it, trapping many aggressive bulls when it does. Proceed with caution! A retest of lows is a strong possibility and loading up on long positions at this point would be premature.
Small caps continued to pop in the morning session, but dropped off in the afternoon. However the Russell 2000 that we featured yesterday was up well over 2% on the week. I think small caps will ultimately lead us off the bottom of this dip. They are making progress and may allow us to invest sometime next week it they continue to do so. Yesterday we observed that small caps may be bottoming. RevShark had a few comments about the subject: “A positive development the last few days has been that small caps stocks continue to outperform. Small caps were the canary in the coalmine at the top and now they are signaling that they are improving. It is unusual for small caps to lead off the lows but they have corrected far deeper than the rest of the market and are starting to attract some bargain hunting.” (His website for the serious investor is SharkInvesting.com)
Here’s the latest headlines:
Wall St. gains one percent on results but S&P down for fourth week
The day’s action left us with the following signals: C-Sell, S-Sell, I-Sell, F-Buy. We are currently invested at 100/G. Our allocation is now -5.73% on the year not including today’s results.
| 10/16/14 | |||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 14.5515 | 16.7364 | 24.4666 | 32.8207 | 23.4959 |
| $ Change | 0.0009 | -0.0560 | 0.0048 | 0.3777 | -0.1633 |
| % Change day | +0.01% | -0.33% | +0.02% | +1.16% | -0.69% |
| % Change week | +0.04% | +0.52% | -2.26% | +1.24% | -1.41% |
| % Change month | +0.10% | +1.52% | -5.47% | -3.66% | -7.10% |
| % Change year | +1.85% | +6.32% | +2.48% | -2.52% | -8.09% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 17.0886 | 21.9024 | 23.4535 | 24.7373 | 13.932 |
| $ Change | -0.0020 | -0.0036 | 0.0007 | 0.0084 | 0.0050 |
| % Change day | -0.01% | -0.02% | +0.00% | +0.03% | +0.04% |
| % Change week | -0.24% | -0.69% | -0.85% | -0.93% | -1.06% |
| % Change month | -0.97% | -2.80% | -3.60% | -4.11% | -4.72% |
| % Change year | +1.62% | +0.49% | -0.02% | -0.39% | -0.93% |
