TSP Distribution: C-fund 50%, S-fund 40%, G-fund 10%
This past Friday was not as nice as the Friday before. If you remember, Friday a week ago basically saved the week from being a major loser and this week we got just the opposite. What makes this Friday worse is that every single index created a Pivot high. So what does that mean? Normally it means that the next 3 to 5 days are going to be down days. So this is bad. Is it devastating? Not yet but what we need to prepared for is bailout points if it gets really bad.
S&P 500 levels to watch are the 50 day moving average and that is currently $1346. If we break down through that number, all warning flags will be flying. If we close below $1334, then a bailout is warranted.
Small Cap levels to watch are a little different. The Small Cap created a pivot high that was lower than the last, so this is doubly bad for this index. We closed almost on top of the 50 day moving average, so we have all the warning flags flying now. A close below $664.50 will warrant a pullout.
This is earning seasons and it is the Summer time and for the past two summers it has been a nightmare to trade. Be very cautious here and if your gut is saying pullout, then pullout. I would really like to hold onto my 10.24% gain for the year but I fear that even if I pulled out Monday I will lose it. So the only thing to do is watch the markets closely and make a decision day by day for the next few trading days.
One more thing to note. In the last 11 trading days, bonds have been on a sharp incline climb. I’m really stunned that it has made this progress. It normally means big money is running to safety. Another warning sign and something to watch.
I’ll be watching closely once again next week.
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