With all the drama in our Government with the budget and debt ceiling, I was forced to make a move this week on Wednesday in the C-fund that turned out to be a small disaster. This is the kind of disaster I can live with because it didn’t cost me a dime and I managed to get a large portion of the 2 day gain Thursday and Friday. Only the C-fund fired a sell, so I stayed in the S and I. So you can now call my current distribution aggressive/conservative with a 40% conservative mix of G with my old setup of S and I. I would say that I have more risk than the L-2020 but not as much as the L-2030. What does amaze me is that the markets snapped back on no news whatsoever. The last 2 days erased all the losses for the last 11 trading days or 2 weeks of downhill sliding. That is incredible.
I also want to point out that once again the monthly advise to ignore this recent knee jerk move and stay in, was the right call. I never claimed my daily method was magic, but if it forces you to babysit your money, my mission is complete. Monthly means calm for you and Daily means lot’s of watching and work for you. Choose your poison.
So now the question is three fold for me, do I re-enter the C, put more into the S & I, or just let run as is? Where is my Genie in a bottle? I still believe the markets are destine to go up but until lawmakers stop playing games an start running this country as a business instead of a platform, which way we go is like playing Russian Roulette.
Technically speaking though, I can show you that as of Friday the C-fund will be a buy Monday. So why don’t we just jump into the charts.
For as long as it took to generate a sell signal on the S&P 500, it snapped back so quickly that a buy signal was fired Friday afternoon at the close of the day. CBL is used to sell and buy. Trendlines the same thing. Looking at the exit day Wednesday, we count back 3 higher bars and it lines up almost perfectly with the old selling CBL line. See that little closing tick price to the right of the white bar on the last day? That is a buy signal for the S&P 500 or C-fund. Nerve wracking yes but a buy signal none the less.
Now look at that Exit signal. That is the bottom of a perfect higher pivot low, so I will be required to re-draw the short term uptrend to reflect the slower trend line. Why slower? The angle of the line is shallower or has less of uphill rise. So below, you will be looking at the new sell S&P 500 chart. I will keep the old CBL even by the book I could move it lower by three bars.
So the question now is do I make a move Monday? I will save for the conclusion.
Left Small Cap and right International Index. All warnings have been cancelled for both indexes and we are back on trend. Yes, just that fast all the drama on the charts is erased and we have higher pivot lows and price above 50 day moving averages. Trendlines are good and intact. These 2 funds seem to me to more stable at the moment than the S&P 500.
It is easy to see that Bonds are in a sideways churn and there is no gain and there is no losses. To me bonds are a waste of time at the moment and I would just rather be in G and know that I’m getting a little something with no risk. So I’m not an investor here today.
Ok, so I told you to wait until my conclusion so here we go. If I’m going to live and die by my charts then this is going to be a hard pill to swallow for a few of you. I like the charts of the S and I much better than I do the C at the moment. Seeing that the C-fund just fired a buy signal Friday we need that to be confirmed Monday. So by 11:30am if price is up or holding above $1698, re-entering the C is a go. That is the pure technical call. The S and I where never a sell, so nothing has to be done here.
Now each investor has to make their own call in life so I’m not actually going to take that signal Monday no matter what the C-fund is telling me. If the markets are up and I Iike what I see, I will be making a Interfund to 50% –S and 50% - I. I told someone last week my gut told me to pull out of the C and put it all in the I and I didn’t do it. Dummy me because that would have been an awesome move. But over a year, it doesn’t mean a lot. Beware! That is a very risky move and it can only worse if you just go 100% I, or 100% S, and or 100% C in that order of risk. Let your gut be your guide and you have my opinion based on charts.
Have a great weekend
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