TSP Weekly numbers, 5/4/2012

Ouch! The last two days of the week were just killer. I’m hoping that most of you missed most or all of that pain, because the warning signs were there. Last week there were three or four major items that should have sent the markets lower but because everyone was so excited about Apple’s earnings, they got ignored. Apple is just one company, not an entire market. This week more negative news via earning reports, job numbers here in the USA and more trouble from oversea and I think things are starting to catch up with the market. Combine all this with a very long run uphill without a major pullback and everyone talking about go away in May and I think it just came full circle. It also didn’t help that Apple shares sank back down to pre-announcement earnings price levels. Confidence for the Bulls has been shaken. Bonds had a very minor gain at .32%, but a gain is a gain. Monday, it would not surprise me to see the markets go back up with buyers bottom fishing but I think it is still going to be a wait and see week for me. Now to some charts.

I do not show this chart of the S&P 500 much because it can be confusing. It clearly shows that the breakout from the week before failed and now we are back to the channel waiting to see what will happen. $1370 support is once again in play and if things get bad next week, $1357 will be the most important number. But before we speak about that in another chart, look at the 4 points on the charts. They are screaming that we are in trouble. So at face value you have to be very careful if you are invested here and if your out, stay out.

The second S&P 500 charts shows a little more clearly the fact that price has fallen below the 50 day moving average and odds are when this happens, a down turn is emanate. Here you can also see clearly the $1370 support and the $1357 bottom channel that must be held. Keep in prospective that what happen last week is that we fell back into the undecided territory and we must stand down while we wait to see what will happen next. Why bet on it? To me there is no reward for the risk that I can see in the charts.

Here is your only shinning hope if you are still invested in the C-fund. The Weekly chart, which I swore at the beginning of the year I was going to try to stick to, is still saying it’s ok to be invested. When the 10 and 30 week moving averages cross it is a good sign a long term trend is in effect. It will never get you out near the top or in near the bottom. Right now the 10 day green line is turning down while the red is still climbing. In the early stages of a reversal, this is normal. So right now in time, using the weekly chart you are good. I guess a better method  is to combine all this information and scale back. So if you’re 100% invested in the C, maybe scale back to 50 or 30 percent. The only other thing to note on these charts is the fact that the oscillators on this chart are showing warning signs and some are saying bailout. 

Above are the Small Cap charts for the S-fund.

Above are the International index chart for the I-fund

Above is the Chart for Bonds.

Conclusion: I think it is pretty simple, if your already out the C,S and I stay out. If your not, be very careful. You might get a bottom fishing bounce next week but the real point is to watch all the levels that we pointed out above. If your in Bonds, stay there and if your not, consider it. There is major overhead resistance not to far away, but if the S&P collapses, I believe that resistance will be broken. By far the best place to be at this point is the G because it is safe. Even 100% G is not a bad thing until we get a direction. If any of you ever wonder why I never say anything about the L-funds, that is because they are nothing but a combination of all the indexes that were talked about above. They do smooth things out, but if the indexes are getting pounded, so are the L-funds. Just look at the graph at the very top of this blog post.

It is very possible that we will stay in the channel on these indexes for weeks and it is also possible to break in either direction. Right now there is no evidence of either. So waiting is the only real option. Like I posted Thursday before Friday’s crusher day, things just look very scary to me at this moment in time. So be careful.

TSP Distribution:  G-fund 75%, I-fund 25%