We are fast approaching the end of March and the end of the first quarter 2014. So far things have not been great compared to 2013. We have had a very shaky start to the year with some very hard pullbacks and chop. To me, this week seemed a lot worse than it actually was because my personal stocks took an absolute beating. I have realized the most profit ever in my account in the first two an half months, only to see me give back 50% of that gain in 7 trading days. That hurts. That loss right now is unrealized, so I still have time on my side to get it back. Not sure it will work out that way.
Now I mentioned that the week seemed a lot worse than it was. That is because we are coming down off of highs and my stock portfolio. When you consider the S&P 500 and Small Cap didn’t even fire a warning yet, what’s to worry?. I mentioned to a few folks at work that I thought the Small Cap was due a pullback to 1006 level, just so the current trend would stay healthy. We are still at 1025 on the Small Cap. The S&P 500 I think is right where it needs to be, and now the uptrend needs to restart. International is in trouble but is setting up for a possible interesting move. Bonds, still have me befuddled.
The last 5 trading days on the S&P 500 have been down. No real damage has been done and some would argue that we need a further pullback. The point I’m going to make is that I expect price to stop here and reverse back up fundamentally because the last pivot low is the first warning level in red on the chart above. We do not want price to fall below the last pivot low because it breaks structure in an uptrend. It would not be a disaster if it does because our sell or bailout level is the dotted green line and that level is approximately $1776. One more note here, if price falls next week, just be advised that warning 1 and 2 will fire almost simultaneously because those levels are getting ready to merge. Conclusion: Watch & hold if already in. If your out, stay out for now.
The Small Cap above was making all times highs a week ago, but I was really thinking that it was a bit stretch. Price for the first time in a long time was above the channel, so it was looking overbought. I made the comment at work that I thought it would be good for structure if price would fall back to 1006 level and then restart. We are still sitting at 1025 and Friday we actually got a pop up. Based on the last pivot low, that pop up on Friday was spot on the money and due. So maybe price next week will churn sideways for a bit and consolidate or maybe start back up. Who knows! Conclusion here is the same as the S&P 500, we are a watch.
Last week I mentioned that the International might be setting up for a run higher if it could hold above support. Well that didn’t happen and as the chart shows above, it had a horrible week. Not only was it not a buy, it fired warning 1 and warning 2. If price falls below the purple line on the chart this week, it will be an out right sell. Ok, do you feel like gambling? Do you? Most of us do not gamble with our retirement account and logically you really shouldn’t. Ever! But looking at the structure and if we zoom out a bit, could we be setting up for a nice entry or buy??? Let’s look at better chart below.
Starting around June 2012, look at the circles drawn on the chart above. If you would have bought at each location, you would have kicked ass. Are we getting ready to create another entry point? Now go back to the previous International daily chart above this one and see the box I drew? If price continues downward into that location, I may take a dive into the I-fund and see what happens.
Safe conclusion on the International today and Monday is to just stay out. It’s currently ugly. If you are in, might as well stay in until we get break in the green uptrend line.
This week according to the Daily chart, bonds fired a sell, confirmed it twice, and then ripped higher on Thursday and Friday. Bonds just have me befuddled. I’m not invested here in my TSP account and will not tomorrow until I figure out the pattern. I am invested in them with Grandma's money because monthly charts said to be in. I will be curious on March 31st if it holds up. If today was March 31st, the answer would be to sell. Conclusion, stay away on the daily chart moves. No pattern whatsoever. I would only invest in Bonds on monthly signals.
So what a week we had last week. But when you look at the overall picture it really isn’t that bad yet, but it will be if we have a repeat of last week, this week. For the year, the earnings for our TSP’s have been flat, specially when compared to last years double digit gains we received. So, let’s just hope that things settle down and start to climb. Nothing to do here but watch and wait.
Hope your having a great weekend. I also hope that this damn weather will finally break to Spring and all this snow will stop. Stay warm.
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