What a difference a week makes!! Scroll down and look at the S&P500 chart from July 8th and look at what I said was likely to happen and then look at this weeks chart and you will see we are on course. Does this mean I can read every situation and get it right every time? Hell no and not even close. What was said is that we moved up so fast, that in order for the market to be healthy that a little pullback was in order as along as it did not go below $1295. It was just a lucky guess and one that might not happen again for years, but you start to recognize certain situations after awhile and sometimes you call them right. So when someone asked me this week if I rolled out of the market and into the G-fund, I said no because my support point had not be broken. I road Monday down and then road the rest of the week back up. There is still a a lot to fear if you listen to the news and I’m not totally insulated from it, but I’m still under the belief that the Politicians of this country will eventually come up with something to kick the can down the road for the next few years. I didn’t say fix it, just kick it down the road for another generation to fix.
Here is the Daily chart for the S&P 500 this week and it shows that we clearly bounced off $1295, created a higher pivot low and started back up to $1344 resistance. I expect with all that is happening in Washington that next week could be volatile. It not to late to bail and you should be safe through Wednesday, but if nothing is done by then, who knows what will happen. I do know that in the end, this is going to backfire on the Republicans or President, I just can’t tell who yet. The one other thing of note that is helping stabilize the market is the good earning reports on the NASDAQ. Google and Apple knocked them dead and so goes the market. Most big companies seem to be doing well but we are just starting the earnings season this quarter.
The I-fund and or the International fund is now a must watch for a return to the good. It has established a base of support at $56.70 and appears to be breaking out of a down trend. It needs to go a bit more, pull back to something above $57 and then start climbing again. So, for now it is a watch, but something to put on our radar.
Conclusion, I will stay put at my current levels and watch my charts closely. My line in the sand will still be in the 1300-1295 range.
TSP Distribution: C-fund – 35%, S-fund – 35%, G-fund – 30%
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