Good evening, Those of you following TSP should have received an interfund transfer recommendation for 30/C, 70/S, in plenty of time to meet the 12:00 PM deadline. Unfortunately, you had to sit and watch as some nice gains passed you by. When will Thrift give you real time trading? The end result, TSP held steady for the day. Conversely, AMP was fully invested and captured a very nice gain. Of course, AMP participants didn’t have to worry about making any changes as it was done for them. That’s one of the reasons why TSP participants should get out of TSP when you can. It’s a great program while you’re in the government and they are matching your funds, but not so good when you leave government service. There are just too many restrictions on your trading and not having real time trades is a big one of them. The V Shaped bounce has returned. Just when you thought it was history, it came back with a vengeance, bringing the market up close to 2% across the board. The NASDAQ cracked the 2% barrier to reach +2.4%. Every chart I have shows a V Shaped formation that we now know leads great things when it executes. I don’t know if anyone else considers it a textbook chart formation, but this analyst does! As of tomorrow morning, we should be sitting in the cat bird seat in both TSP and AMP. I would put out a word of caution for you eternal optimists so that you’re not discouraged. We had a heck of a pop today so I wouldn’t be surprised to see some back filling tomorrow. We’ll watch and see. Another observation on the day. Gold, which had been doing quite well in recent days, made only a small gain as the dollar turned back up again. US equities were the place to be today!
The day’s action left us with the following signals: C-Sell, S-Buy, I-Sell, F-Buy. As of the close of business today we will be invested at 30/C, 70/S. Our allocation is now -5.71% on the year not including today’s results.
Now on to the charts. Before we start, the C Fund still shows a sell signal based on our normal indicators. However, a decision to buy in that fund was based on the fact that it is following small caps which did manage a buy signal and on the V Shaped pattern that has formed on both charts. (All charts courtesy of Stockcharts.com)
First the C Fund: I have annotated the chart. I will add that price traded for a second day above the 200 EMA on good volume. Once again, a decision to ignore the current sell signal was based on the V shaped pattern and strong performance in small caps that are clearly leading the way!
Now about those small caps. Here’s the S Fund that has more than a few of them. Price is now trading above the 200 EMA. The S Fund is a legitimate buy signal strengthened by the V Shaped patter that executed today. Price is projected to rise to resistance at around 88.40. This chart has plenty of room the run.
It could be said that I jumped the gun, but all my small cap charts that are leading the way have buy signals and all my equity based charts are showing the V shaped pattern that hasn’t failed since I can remember. Things are looking good. However, as I said earlier, I wouldn’t be surprised to see some back filling in the next day or so, but I fully expect a rally into the New Year with positive seasonality to our back! As always, I will add the disclaimer that I am a reactive trader and will take what the charts give me. That’s all for tonight. God continues to mightily bless our group. Be sure and give Him the praise!! Have a nice evening.
God bless,
Scott
