TSP Distribution: S-fund 50%, C-fund 50%
What a week we had this week. Price did a total about face and re-established itself on the past uptrend that has been running since November 2012. Believe it or not, that is a true statement. Go back to November 16th, 2012 on a daily chart and you will see where this current uptrend started. Ok something I have to point out here. Obviously after the price action this week the top has not been reached yet in this current cycle. Yes there was a blip, but even the pullback we had was so minor at 2.9% that it doesn’t really qualify as a true pullback. If the market is going to correct, I would expect a full 10% drop. Not that it is an exact science, but it normally gets close to that level. The last major pullback started around September 14, 2012 and bottomed out at 8.8% on November 16, 2012. Go back and take a look at the S&P500 during those times and that is what a real pullback looks like. Oh hell, let me show you below.
See the grey box? Notice that price dip below the 50 day moving average and the two 50’s actually crossed showing a slowing of price? Now look at the last price pullback and you will see a major difference. Price never crossed over the 50’s and for that matter, the 50’s never crossed. Yes there was a lot of drama but no exit sign was ever given. This is my simple version of the action because most of you know that I have several indicators that I use other than just the 50’s. Remember, Price action is always number 1.
So what’s my point? You got to have a reason to get out and you have to have a reason to get in or this stuff gets really hard. It’s like breaking up with your first love and then after a week or so, running back to them and trying to get back in their good graces. Ok, maybe that was a little over the top. Let me put this in plain old English. If you bailout because of news or emotion, how and when do you get back in? Notice I said news or emotion, not a goal. If you have a certain price goal and bail, that is totally different because that is like buying a stock and taking a profit. No one will or should fuss at you for taking a profit, even if it’s $1. But my point is the other reason, you have to have a plan. A plan to get in and plan to get out. No news and no emotion. Price never lies and price always pays one way or the other. Ok enough rambling, let’s look at the four indexes and see where we are after this weeks close.
Ok first on the left is the S&P 500 and believe it or not there really isn’t much to talk about. Why? Because price is above the 50’s, CBL, and uptrend line. As a matter of fact, the primary and intermediate uptrend line are both intact. Next price closed at a new yearly high and it looks like a new uptrend channel, even though to steep, has been built this week. I even had to move the CBL line up this week to keep up with price movement. So there is nothing not to like here.
The Next chart is the Small Cap and it is almost a photo copy of the S&P 500. The only thing I had to adjust is the intermediate uptrend line slowed down a little bit, so the angle was adjusted to the new higher pivot low. The only thing that I could find that was negative on both charts is that you could argue that both were overbought. I use this information as information and not to make moves in my retirement account.
Above we have the International index and it put together 4 days that are rising and do give hope. I personally do not like the looks of the chart because it is so choppy and it’s hard to see the trend in either direction. We need price to continue to rise through $59.59 and then pullback and reverse at or above $57.58 and then zoom back up to this last pivot high. Jargon! Ok, let’s just take this a day at a time and wait for price to at least get though $59.59 and see what we got. Not enough reward compared to risk here.
Ok, this is the kind of stuff everyone needs to see and experience so they know what I false breakout looks like. This happens in stocks all the time and the trick is to bailout when they fail. You can’t cry about it, you bail and wait for the next move. Remember, discipline and make sure we take no double digit losses. So 10 trading days ago, Bonds had a major up tick and went through 3 buys signals in one day. The following day it just barely confirmed the move and then the next day it did confirm. So by the rule book, you could take the signal and invest in Bonds. I made a mention in my blog HERE about it at the bottom of the page. Shortly after the confirmation, things started to fall apart and this week by Tuesday, it was broken. Price has completely collapsed and I would not invest in bonds. If I want to be safe, I will either run to G or L-income fund.
This was are first great week since the January 25th update. Yes it has been that long since we got a full positive week with no red except for bonds and it felt good. Most of our gains in February were very small week to week and some weeks were up and some down. So this week felt really good. I know personally my account was up 2.67% for the week and up 9.23% for the year. Yes another all time high for my TSP. Not sure what the future holds because of this. All my data and decisions are based on past information, so there is no way I see or predict the future. But I can see what price is doing right this minute and right this minute, it says, “Be invested”.
Have a great weekend.
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