That was an awesome week and I would have really liked to have had that 3.5 to 4% up move in my pocket, but the risk of just the opposite happening was just to great. Remember the week before we were down almost the same exact percentages and you didn’t see anyone bragging about getting those negative numbers, so do not let this weeks gains bother you. If someone claims to have gotten a 3.5 to 4% move this week, ask what they got the week before and then the kill shot, ask them to show you a statement to prove it. 99.9% of the time, that ends the conversation. What we want to do is not pick tops and not pick bottoms, but to find the safest time to enter the markets and ride the wave to get the meat in the middle. I’m sitting on a 9.42% gain for 2012 and I could end the year with that and be extremely happy. I enjoy watching the numbers and charts and I will wait until I feel it is time based on those charts and not the news. So let’s see what last week did to our charts.
The S&P 500 really had a great week but the week before was horrendous, so it was basically a wash. What I want to show you here is that downtrend line was broken and that is a very good step for us to raise our awareness that re-entry could be around the corner. The next rule was the Count back Line or CBL, which the price for that is $1331, and we came close Thursday but bounced deep away. Then Friday we made a valiant effort in closing above CBL but came up short. Lastly, price is still below the 50 day ma and until we close above it, we have to stand down. I think the risk next week based on what we will see in the International Index later is that we create a pivot high and that would mean prices are heading down. The chart right now in time is giving that look. So we are still outside looking in with the C-fund.
The Small Cap of our 3 indexes made the best moves of the week, even though the percentage was not the largest. I put numbers on the charts to correlate the info to the chart points. But what I want to point out is the downtrend line was also broken here and that is good. At first glance you would think that we broke the CBL line, $666, but actually we traded above during the day but closed below $666 by the end of the day. So that doesn’t fulfill rule number 2. Last point is that Friday we came really close to closing above $666 and it will make for an interesting Monday here. Even if the CBL falls which is good, we still got a long way to go to break the 50 day ma. So like the C-fund, we are still outside looking in with the S-fund.
The International Index had the largest percentage move this past week but considering in the last few weeks it also had the largest percentage moves down, moving up is no surprise here. We broke the downtrend line but not the CBL nor the 50 day ma. So just like the S&P and Small Cap there is work to do. Now the bad, this index created a pivot high Friday and that normally means the next few days the odds are we are going down in price. If there is any bad news in Europe over the weekend and into Monday, the opening Monday could be ugly for them and the US markets. So just one charts puts everything back in doubt for me and I will be watching closely Sunday night pre-markets and early Monday morning.
Conclusion: I still believe we should be staying put in the G and not betting on any direction. Your going to have a few that are willing to take chances but the larger your account value is the less likely you are to risk that money. I see no reason to take the bet.
TSP Distribution: G-fund 100%
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