Can you believe that it is September already? Before you know it, it will be snowing. The first part of the week the markets were rolling and then bam, Thursday and specially Friday, we gave it all back. So technically, we had one week of gains, then we are back to losing.
The two charts above are the S&P 500 and the Small Cap. What I want to point out is the Pivot high’s on both charts and the Pivot Low’s. What you like to see in a healthy market is for pivot’s stair step up like a set of steps and right now it is perfect. I realize that Thursday and Friday sucked, but this is good as long as as we do not fall below the last pivot low on both charts. We also have a nice channel forming and we want to stay in the channel or accelerate through the top of it, but not fall through the bottom. Falling through the bottom would a total break down of the current short term trend and I would bail to the G-fund if that happens. So, all we can do at this moment in time is to wait for next weeks opening an see where it leads. Unfortunately all my hard earned gains for the year were taken in two days. Ugh!
The bonds are still looking good and even though I’m not invested here anymore, I would still recommend them looking at this chart. The bonds are building on another pivot low and marching higher. What I would watch next week is if Bonds and Gold continue to climb. Both have had very nice runs and I just can’t imagine that most large firms would be throwing much more money toward these investments. They are over extended and need a pull back to make them look appealing. That doesn’t mean they are about to fall apart, it is just an observation.
Conclusion, If your not in the C, S, an I, stay out and waiting for the next pivot low to jump in. If they break below their channels, then stay out. If you in the C,S, and, I then watch those levels on the charts closely next week and be ready to bail. If you are in the Bonds, I-fund, I would ride until it turns.
TSP Distribution: C-fund – 35%, S-fund – 35%, G-fund – 30%
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