TSP Weekly Numbers 11/9/12

TSP Distribution:  G-fund 100%

This was a crushing week in the markets and I personally took a 2.22% loss in my TSP account. The warnings were there and I spoke about them ever since we broke below my CBL line and 50 day moving average October 24th area. I made an exception this time by not bailing out after the 50 days were broken because when price started consolidating between $1417 – $1406 I felt safe. At the same time I saying bailing out for the rest of you was approved and if you were out stay out. I hope the majority listen to those warnings. I have only had one person that is out asking me if the time to catch the bottom is here. Look, I do not call bottoms and I do not call tops. I look for reason to be in or out based on trends. I’m a trend trader of individual stocks and use the same basic moves with my retirement account. Understand that trading individual stocks is entirely different because it is just one stock. Trending following an index that contains 500 stocks is a little easier.

I have already spoken about the election and what is believed to be the reason for the selloff and if you missed it, CLICK HERE.

We have a few new lines on this weeks S&P 500 and they are not saying anything we want to hear. First up is the new Red downtrend line drawn using the last 2 pivot lows and you can see the last 3 trading days accelerated down through that trend. That is bad. I do not expect it to continue next week at that accelerated pace, but by all indication of the chart we are heading lower. The factors are two fold in my opinion, one being the Oversea problem with the Euro again and the end of year Tax problems that individuals / stock managers have on the books. I also added the 200 day moving average in blue on this chart because when price falls below this, it brings on the sellers. It also could be a long term indication that we are entering a new bear market.

Something I want to point out that I read from a stock trader online is notice on the far left of the chart where price fell though the 200 day moving average. The last time that happen we marched choppily uphill, but uphill we went. I’m just not sure the circumstances are the same this time.

Re-entry? Ok the simple re-entry into the C-fund or S&P500 is based on the CBL line going up. Yep, CBL works in both directions and works very well if you listen to it. The nice part about that re-entry point if it should come about is that price will close above the 50 day moving average. I’ll just have to look at the charts when that day comes. If you want a really high risk gamble and instead of trying to bottom fish, wait for a pivot low to be created. So based on Fridays closing price movement, you would need price to close above the top of that last day or $1392. Then the following day if price was still holding above $1392 by 11:30 – 11:45, then make the dive into the market.

All of the last paragraph is all part of having a plan and watching price and not news or your gut reaction. At least you can actually see it with your eyes and you can make a logical decision. So after reading all this you know Monday at best is a watch day and I will not be making a move.

Ok I included above the Small Cap and the International index. The Small Cap just confirms the exact movement of the S&P and you should be out. The international index fired a sell signal Thursday and confirmed on Friday.

In bad times when stocks are getting hammered they always say you should run to bonds. Well I just do not see it at the moment. Right now it is churning sideways and I see no movement in either direction. I guess we should watch this closely and if we start to move higher, we should park a little money here.

Conclusion: Do you really need me to say it after that post? Stay out and watch. I will rest my monies safely in T-bills and earn nothing but will also lose nothing. Turmoil in the markets for the next weeks is what I feel is going to happen. Watch and relax in safety.