This was a very interesting week to watch. Basically Monday through Thursday was pretty gut wrenching to watch. Up, down, up, and down and it was really hard to tell which way this thing was going to break and I even mentioned this in Thursdays post. I said the more it churned sideways the more likely it was going to break soon and it did Friday. To the left is a 10 minute chart of the last 5 trading days and Friday is easy to see. What is so interesting about this is that we were in red territory all we on the weekly numbers but if you look above you will that most weekly numbers were up. Look real close at the International YTD column because we are almost back to even. Ok, so we had a big move Friday and we also know that there is a big election Sunday in Greece and depending on what happens there, the markets could blast off or tank. The people of Greece will basically vote for whom they want in their government and depending on who they vote in will mean they want out of the Euro or they want to stay in. If they vote in, the markets should rock but if they don’t, look out. So what are we going to do? Let’s see what the charts of the S&P 500 are telling us.
Ok, for a while now I was saying that we had to break the downtrend line, the CBL line and then close above the 50 day moving average. Well after Friday’s big move, we have an entry signal. It doesn’t matter what the news is, we have a signal. But what makes this one special is that there is no way we can execute an entry into the market until 4pm Monday afternoon. So if we log into our TSP accounts, we have to make the move by 12pm and then it goes into effect at 4pm and this gives us the advantage of knowing how the market is going to react to the Greece election. Do not worry if it has a big move up because we are in for the long haul, not a daily move. But, if the markets are tanking because of the
If you get 65 percent of the S&P100 stocks trading above their 150 day moving average that is super indicator that the overall market is in an uptrend. We are not quite there yet but you can see by opening up the chart to the left that we have made some big moves the last few days and we could crest 65 by Monday or Tuesday at the current pace. The momentum indicators under the graph are all positive indicating that we will break 65 soon. So here we have another strong bull indicator screaming at us. You see, you can get a good read on the market without a newspaper or a TV set. All they do is make you emotional and then we make very bad decisions.
Ok with me doing all this talking about jumping back in, where does that leave us with the Small Cap, International, and Bonds. First Bonds, they are bouncing off all time highs and look to be a little risky to enter. If the stockmarket truly takes off Monday, you will not want to be near bonds. The Small Cap has still got work to do before it gives us a entry signal as well as the International. So as of this Monday goes, only the C fund/S&P500 is giving us an entry, so we will just follow that entry. My last word on the markets is this, the Dow Jones 30 is actually leading the S&P 500, which is a good confirmation indicator but not the only one I use. I like to see the overall market trending in the same direction and right now we are split about down the middle. So as far as picking the bottom, this will likely be the closet you will ever see me call, but I will call and entry here but only if Monday is even or up by 12 noon. We will know what the Greece effect is at that point and what effect it is having on the markets. Do I think we are going to go way up like the last run we had from October to April? Who knows and no one can really make that call, but I can see a trend and the trend just said go.
Monday if we are up, I will move at least 50% into C and leave the rest in G. I will make a report here on my move prior to 11:30am unless I can’t get to my computer. But I gave you all the information to make the call yourself. Till Monday!
TSP Distribution: G-fund 100%
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