Not a bad week in the markets, even though the latter part of the week was a bit shaky. The S&P 500, which our C-fund is tied to was up 1.11%, the S-fund is tied to $DWCPF was up .8%, and the Nasdaq, which is not tied to any fund was up 1.9%. So not to bad. The I-fund I will talk about later.
The S&P 500 has been running in this uptrend now since September 3rd and even though we have had a few small pull backs, you know eventually the party will be over. Today we had another Red Flag fire off, so up go the caution flags again. We just did this last week and here we are again. I’m starting feel this trend is getting tired, but in the same breath I know that I got to follow the trend until a new trend is confirmed. We have a little positive to point at and that is the volume. 
If you click that little picture to the left you will see that volume did indeed return after the Christmas and New Year holiday was over. The primary trendline is holding and even if we pull back a bit, we will likely still be above that. Another issue that throws up a little concern is the Advance Decline line which is shown here:
You will notice that it is flat and or slightly falling. So we have a few concerns and all we can do is wait for more data, confirmation from other indexes, and just know to be vigilant.
The Small Cap index, S-fund didn’t have as good a week as the S&P or the Nasdaq, but a gain is a gain and I will take it. Unfortunately the Small Cap index also fired off a Red Flag warning Friday and that is a confirming signal for the S&P. We have a few signals here that lead you to pause and say maybe not so fast. The volume is good, and the RSI is falling but it is still above 50 and not over bought. The MACD is starting to rollover, but not negative yet. So once again, be aware that we have a Red Flag and wait and watch closely what happens next Monday and Tuesday.
The two charts above are the Nasdaq and the Dow 30 which have no tie in to are TSP funds, but the Nasdaq is a very large indicator that we cannot ignore and what happens there affects the entire market. We also like to see it react in sync with the S&P so we know when to move in and out of our funds. The Nasdaq did not print a Red Flag and there is nothing not to like here except maybe it’s a little overbought. The Nasdaq looks healthy and strong and this is good for the overall market. The Dow30 on the other hand did fire a Red Flag, but since we only have 30 stocks in this index, just how much power can it have? I use it as my fourth indicator but hardly use it as the single indicator to help me make a decision. It has to be inline with the rest for me to add it into the scenario.
Friday, if you money in the I-fund or EFA index, was the pullout day. 3rd Red Flag in a row and there is nothing about this chart to like. As a matter of fact, if I could short this index now is the perfect time to do it. RSI is below 50 and falling. The MACD is in a negative downtrend. If this index falls below $57.25 next week, then look out below because we could be looking at another 7% drop before it finds the next level of support. So, be very, very, careful here if you in or thinking about putting money in here. You had better have some inside information or you’re just a gambling type of person. The current trend setup is not looking positive.
So for our conclusion, I will stay invested for the time being and will be watching closely once again next Monday and Tuesday. If we get our second Red Flag in a row Monday, then Tuesday would be decision day. If we get a Green flag Monday, then that cancels the Friday warning and we stay on course. I’m not invested in the I-Fund nor will I.
TSP distribution: G-fund 20%, C-fund 40%, S-fund 40%
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