Week ending June 4, 2010

We had a short week this week because of Memorial Day weekend and even as dramatic as the close was on Friday, it really wasn’t as bad as the news people would make you believe. We open the week at 109.369, Tuesday we closed at 107.53, Wednesday at 110.33, Thursday at 110.71, and then Friday at 106.82. So we were down 2.55 points or 2.3%. Yea the news about new jobs was bad, the world is still unsure about Europe, and then there is all the BP stuff, but it really didn’t do anything for me or us. When still have no up or down trend we can follow and invest with. So as far as the C-fund, S&P 500 goes, we sit and wait and do not open or invest in anything new in this market. We are still straddling the 50 Week MA and until we clear it one way or the other, you can’t make a move. The bad is the RSI did fall below 50 for the week to settle in at 46.55 and by itself it is a negative. The good news is 4 of the last 5 weeks have been ugly but we have bounced off the 1st major support every time and that does give me comfort. I stay invested in the C-fund as it stands today.

The Small Cap index, DWCPF closed above the 50 Week MA and the RSI is still above 50 and that is the good news. The bad news is that it closed lower than it has since the week that began February 14th. We began the week at 553.55 and ended at 534.69, which is 18.86 points down or 3.4% down. It is still the strong index that we have right now, but it is also the most volatile, so we can expect big swings. This index like the SPY index just needs to be monitored. The technical's are still in the upper trend mode with a correction, but not willing to call this one in any direction at the moment. I will stay invested in the S-fund for now.

The European index or EFA was starting to show some signs of a recovery this week, but that all ended Friday. We had the lowest close in this index since July of 2009. That is almost a year of retracement in 7 weeks! If you have been listening here, you have lost nothing because you are not invested here. RSI is also at a new low at 37.87 and we are only 3.5 points from taking out the next major support point. The only thing to do here is the short stocks that are in the group. This is what I’m doing in Tradefields and I’m making money. Next week I will be looking to short more stocks in the index with real money. I will report them as I do them. Unless you are shorting, stay away from this Fund. I have zero cash invested in the I-fund.

The real money moves I made today was to sell into to this sell off in stocks. I had a 5 August Put options in GILD at the strike price of 37 and I sold them today for a 55% profit. I also sold 2 September Put options in JPM at the strike price of 40 for small loss of $13 or 1%. This was just not moving well for me so I took the chance to get out. Google is still killing me at the moment, but I have until September to turn this in my favor. I have 1 Sept 470 Put and the current price is $499.98 which is not good. I currently have a 37% loss in this position.

Lastly is the report on my first short position in PCLN. I was only willing to risk a $1000 or just over a 1000 in this first attempt to short. I shorted 6 shares of PCLN @ 185 and the only fee that I see to date is 10.01 in commission. No interest because I have the cash in the account to cover. The current price of PCLN is 178.54, so I have a 3.5% gain and I’m not on the clock. I’m liking this. Yes you can make more faster with Puts and Calls, but you better be right. At least with the short the timer is not ticking.

Turn off the news, watch your charts, and use a stop loss. What’s else do you need to know! Thanks Charles Schaap for making the Stock Market bearable in these crazy times.

TSP distribution:

C – 40% S – 40% G – 20%