Overall not a great week for stocks, specially the Small Caps. We have had a nice long run since October 5th and I didn’t get all of it, but I got a lot of it, so I will not complain here. What I need to do is clear all this past information and ask myself one question if I was sitting on the outside looking in, “Would I invest long term here at this point in time?” No, I think I would pause and wait to see if the Small Cap holds the $700 level and reverses. I would also like to see the Bonds to pick a direction and go with it, so I can get a feel of the thinking of investors. I believe deep down, there are a lot of investors that missed the majority of this big run and are waiting for a pullback so they can jump in. That in itself will act as support. The only other thing that worries me just a bit is fuel prices. They can make and break companies and they can make and break stock markets. We are now approaching fuel prices at the highest prices ever and you can see that here. I have seen a lot ads and people say that gas prices under Obama are or were the worst of any President, but right before Bush left office, we were paying over $4 a gallon here in Stephens City, Va. So not entirely true. This is something we are just going to have to watch.
Now this week instead of going through a lot of charts, I want to give you some numbers that we going to have to watch and if they do not hold, I might run for cover until the dust settles.
Small Cap – $DWCPF – Needs to hold $700
S&P 500 - ^GSPC – Needs to hold $1351
Int’ Index – EFA – Needs to hold $54
Those are the primary indexes that decisions are made off of and the one that looks in most trouble is the Small Cap. Let’s watch it closely next week and closes below $700 would warrant a reason to bail the following day if the trend continues down. Those indexes are clickable and will take you directly to a Yahoo Financial Chart.
TSP Distribution: C-fund 25%, I-fund 25%, S-fund 50%
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