Friday started off in the hole from the minute the markets opened and I guess most would look at that one day of the week as a negative, but not me. After the first hour of trading was complete, the markets spent the rest of the day fighting, clawing, and scraping it’s way back up hill. Monday through Thursday the markets where basically up and for the week we still finished with a gain. So how can that be negative? What was negative was the fact that the Standards and Poor’s down graded 9 European countries ratings which means it will be more expensive for them to get loans. Did anyone not see that coming?
So where does that leave us and our funds? First chart I want to show is the S&P 500 Weekly chart and when you open that you will see there is nothing not to like about this chart. I even drew the Battle Ground area on there so you can compare it to the finer detailed daily chart. So let’s look a little closer at the daily. A few weeks back we had a major battle at $1267 and the Bulls won. Then we blew right past the next level of $1277. 
Now here we are at what I will call the First Major battlefield for 2012. We have to get through $1292, clear it, and then stay above it. We did two out of three this week but we were not able to hold Friday and settled in at $1289. A few of the oscillators, the CMO and MACD appear to be rolling over, but since this rally started on October 4th, it has done that twice before. The Weekly chart says we are in the very early stages of an uptrend, so daily we can and will have pull backs, we just have to ride them. I see no reason to bail from the C-Fund unless you just want to lock in gains, which my previous post encouraged.
Now the S-Fund Small Gap index. The Weekly is on the left and daily on the right. Nothing new to say here because it is acting exactly like the S&P500. I see no reason why not to be in the S-fund.
Next up is the I-Fund or International fund. The first chart up is the weekly and first thing you will see is a downtrend that is dominate, but there is a new uptrend starting at the same time. They are on a collision course that will hopefully give us direction. Reading charts we are trying to find things that standout or show divergence so we can get a idea that things might be changing direction. So if we look at the oscillators we see that the 
CMO, first level under price chart, is definitely in an uptrend and has crossed that middle line or zero. This is the first indication we have a buy opportunity arising. Next oscillator is the KST and it flipped over the week of 11/28/11 of last year to indicate that a new uptrend is starting. The last oscillator is the Stochastic and it just confused. Looking back at the price area of the chart, you will also notice that the 10 an 30 week moving averages are still falling and haven’t crossed to the upside. So while we have some early signs here, I think it is just to early to jump in to the I-fund. My last word here about the I-fund is the Daily chart and everything is just so undecided, but if I had to make a call on this chart alone, I would sell or bailout.
I never speak much about the G-fund because that is composed of T-bills and this is your safe house in markets that are declining. So that leaves us with the Bonds or I-fund. You could argue this chart in both directions and if you can make that statement, that alone should make you pause. First and foremost the 10 and 30 week moving averages have never crossed to the downside but they are flatting out. There is a little 
gray line cutting though the 3 weekly bar back that is giving a buy signal. This is the Parbolic SAR. Then the bottom oscillator in the chart is has turn up and is giving a buy signal. Now in contradiction to this we have a resistance line at $110.64 that just will not fall. What normally happens is the more times to hit it, the more likely it will fall and to the upside we will go. So when will it break or will it just out right fail? Then you have the CMO which is whipsawing at zero and is giving no signal. Lastly it the KST and it is the most damning in that it is indicating that we are in the beginning stages of a downtrend. So what do you believe. Can or will the daily chart help? Yes it can! I would say by looking at this chart that next week we will break out to the upside and roll on from there. The only thing that makes me pause long term it the KST on the weekly chart is saying no way.
So what should we do? If your in the Bond fund stay in until it turns down. If your out, let’s wait a few more days or a week and see what happens. What is lost if your not invest here? Nothing because your not invested here. The only thing that makes me ponder the longevity of the Bond run is that if the C and S funds are going to run, then bonds normally cannot. Something's gotta give.
So in conclusion this week, nothing changes for me and I will stay 50-50 C & S. There is reason to be guarded with the C,S, F, and I because of the charts. I will stay with my weekly’s until proven wrong and see if it helps with all the move from 2011. If you have any doubts or fears, I definitely suggests you retreat to G.
TSP Distribution: C-fund 50%, S-fund 50%
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