Wow it is August already! Well the earning season in the stock market is about 90% over and I believe I heard this morning that 90% of the companies reported better than expected earnings. I also have heard over and over again that companies are sitting on record amount of cash. Sooner or later all of this is going to lead to good, but when is it? Well if you listen to the news, never.
Someone asked me what I thought about the future and what it holds for the market because her and her husband where considering bailing completely out of the market. There are so many things to say, consider, and to be careful about when talking about money, because all of us have different tolerances when it comes to the market and our money. First, if I could predict the future, why I’m I still working and still playing the market? Second, the stock market is something you nor I can control, but we can track and follow. The last word is key, Follow. Play the trend, not the news, and if your playing stocks, use stop loss orders. If your talking about your retirement account and can move from vehicle to vehicle, then monitor the S&P500, Small Cap, Bond Index, and European index and they will give you enough of a heads up to get in or out. You will never get out at the top, and you will never get in at the bottom, but if you can get all the meat out of the middle, your doing well.
One more note, then I will move to the this weeks info. If the Government does not reinstate the Bush Tax Cuts by the end of October to mid November, you have to expect companies and individuals to start selling their positions in which they have big capitol gains in order to save money paying a smaller tax on that profit. This could drive the stock market down. If it does, you will see it in the charts and you can get out of the market in less than 24 hours. Believe me, I have a lot to lose if it goes south.
So after all the hashing back and forth this week, specially Friday, did we end the week up or down? Once again, if you listen to the news, it was a bad week but we end the week up. As a matter of fact we were up 1.92% for the week. Not bad for a week that was so bad!!
The S&P 500 cleared the 50 week ma by almost 2 points and the RSI is above 50 and climbing. Also on the weekly chart we got our first higher pivot low which is another good sign. Give me one more and I will also say we have trend reversal on the weekly chart. The daily chart is throwing out a few warnings in that we are going to test the current up trend line next week. We really need to hold above 108.98, but it would not be the end of the world. The RSI did float lower this week, but still holding above 50. If the daily pops up next week, it will create another higher pivot low and that will just reinforce the the new up trend.
The Small Cap and or the $DWCPF was up 1% on the week but did leave me with a little concern. To view the weekly chart we look good to go, but taking a glance at the daily chart, we are testing support and have dipped through the up trend line. The daily really needs to hold above 540.08 to keep the trend moving. We will be watching the small cap closely next week.
She’s Back!! The European index has been on the move and the weekly chart confirmed what I was hinting about in last weeks update. This index was up 3.9% for the week and by far the biggest winner. The price bar on the weekly chart totally cleared the 50 week ma and the RSI is above 50 and climbing. We also saw it create it’s first higher pivot low which helps to form and uptrend. The daily chart looks flat, but a gain is is gain. Next week, I will be moving money into this fund for the first time since January 2010.
So if the EFA is holding steady sideways or opens higher and holds until noon, I will be moving funds into the I-Fund
TSP distribution: S-fund 40%, C-Fund – 40%, F-fund – 10%, G-fund 10%
Will change to: S-fund 40%, C-Fund – 40%, I-fund – 20% Monday if she holds.
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