TSP 2/14/15 let’s look at the charts

The S&P 500 finally came kicking and dragging to new closing highs Thursday and Friday. It did seem for awhile that it was caught in a rut not able to make any progress. I think it was being held back by the Small Cap. I pointed out on this chart that the pivot low structure did look concerning and would make one think that some type of break was going to happen. What is difficult in this case is to know which way, up or down. That is where longer term charts and trends can help you. Whatever the direction of the primary trend is in, it is more than likely going to continue that trend when consolidation is done. So looking at weekly and monthly charts will help you to determine what is the current overall trend.

If you have any doubts what the overall trends is, click that little chart to the left. Look at that. Look at the slashed green line and solid green line. Those are the intermediate, dashed, and long term trends, solid. Finally look at the 10 mouth moving average in blue. Is it up hill, sideways, or downhill? That is your overall primary trend and it will be the dominate force until it reverses. Even the weekly chart look the same. I have made many mistakes using the noisy daily charts and listening to news. Just remember, if things start to grind, look at the overall trend and know that the primary force will normally always continue in that direction. Weekly chart is out to the right.

This past week we also got a new pivot low that formed higher and put some positive structure back into our uptrend. Volatility is also slowing down and that has to be good for our trend. Low volatility markets are normally met with higher prices. All sell warnings are off and we sit back now and just watch price.

Finally, the Small Cap looks to be taking the leadership role and is pushing the markets higher. The new all time high closing Friday is almost 3% above that all important $1064 level from last July. We need to run a few more days before thing start pulling back. I would really like to see the higher pivot low structure continue up and out. The last pivot low is right at the $1064 level, so now it is even more important that we stay above that level. If, prices come back down through $1064, a collapse will likely ensue promptly afterwards. For now, all sell warnings are off and we sit back and watch price.

The International is just rolling. Up almost 5% since January 1, 2015. Does it bother me that I missed that gain? Nope. I’m in for long term trends, not short. This index is making progress and it will not surprise me to see it a buy at the end of the month February. I know a few of you took the daily buy signal and if you did, that’s good. At least you had a reason. Weekly is still a major work in progress and it might take another 3 weeks to get that signal. Monthly? We are there now as of Friday. I will still wait until the end of the month in case there is a reversal.

   

Bonds fired another warning this week and appears to be in trouble once again. We now have 2 warnings on and it looks like the 50 day ma is turning down. We are still way above the overall trend line. We are still well above the monthly line. Looking backwards on this chart, we have been here at least twice before in recent times. Each time the overall trend held. So warnings are on, but still not a sell on the daily, weekly, or monthly chart. I am going to call the F-fund a hold on the daily and or not buy today if your outside looking in, because it has two sell warnings on the chart. One is ok, two means things might be changing.

Here is bonus look at Oil. Prices should remain level at the retail pumps at the moment. This is the 3rd time in 10 days that oil has tried to breakout of the bear flag to the upside. The more this happens the more it means that oil “may” have found a bottom. News, I know I say not to listen to news, but the news is indicating that companies are storing oil because there is no market for the current supply. You cannot store forever because you will run out of space to put it. So prices might fall even further. With that News said, watching price in the market is really the only real sure fire way to see what is fact or fiction. Right now they are steady.