Ok, we all know by now this was one of the worst weeks in stock history. We, and when I say that I mean the indexes, gave all the gains of the year up plus some. Instead of me telling you what to do if you’re sitting on the outside looking in or in riding this wave down, let’s take a different point of view. What if you were a first time investor and your looking at putting all your new money into the C-fund Monday morning, what would you do looking at this chart?
Is there any indication of a uptrend? Is there any indication that it might reverse and go up? No! Nothing and there is no reason to put new money in and no reason to be riding this bad boy down. Next let’s look at the Weekly chart below.
The long term up trend that has been running since March 9th, 2009 is over, done, and finished. At this point it is nothing but a waiting game to see if we get a repeat of 2008 or a sudden reverse to fill the gap. I will not participate in this market for awhile without some direction. Right now, even the professionals are guessing.
What I want to show next is the charts for the Bond Fund or F fund in the TSP. I will show you three charts, 30 minute, daily, and weekly. Friday’s move in the Bond fund just totally baffled me in that it was down from the minute the market opened and trended down all day. This move was before the S&P downgrade from AAA to AA. Does this indicate insider trading? We little people will never know. The 30 minute chart gives us a pre-warning that if the 5 day moving average doesn’t hold, we could start down hill. The Daily shows a very fast move up and maybe they are just taking a little profit off the table, but still holding an uptrend. The Weekly is showing a very nice uptrend with no threat yet, as the weekly always smooth's out the noise of the market.
So after looking at the three charts above, it is only the 30 minute chart telling us to be watchful and let’s see what happens. Now talking about this downgrade from the Standards and Poors, there is a lot of chatter on the boards that it was just sensationalism. Let’s think back a bit, this is the same organization that was rating all the banks telling everyone that all was ok and there was nothing to worry about all the way up to the beginning of the collapse. When you look at the debt of the French and English and also what they consider a safe investment, U.S. Bonds, this also makes you wonder what all this is about. I’m not saying that we as a country do not have a problem on the books with debt, but really, compared with what. Why haven’t Moody’s downgraded the US also? I do not know what to expect Monday morning and all of next week, but I do know that I will be watching from the sidelines except the F-fund.
Conclusion takes me back to my favorite saying that I awhile back. I would much rather wish I was in the market, than wish I was out.
TSP Distribution: F-fund – 50%, G-fund – 50%
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