TSP Distribution: F-fund 50%, C-fund 50%
These are the weeks that make most shrivel up and run for the hills. It freezes your mind and makes you make bad decisions or worst yet, no decision at all because you are frozen. Most of us remember late 2007 and all of 2008, but a lot have forgotten about 2000 through 2002. I remember both and the last down trend was the final straw that made me dive into this Stock Market stuff and try to find some comfort in my decisions. Remember, there is no perfect system when you are dealing with the stock market and if you find it, find me, I really do want to see it. My system is not mine, it is a combination of things that I read in books and practiced with since late 2008. I have tried my best to tweak it and find a way to keep me in longer so I do not have to make many moves, and not take big losses. So what are my goals? You should know by now, but if you don’t, let me remind you. 7% a year and no losses in any 12 month period that is in the double digits, 10% or more. So how have I done? 2008 and 2009 is when I knew it was time to start learning to make better decisions. By 2010, I started trading stocks and tinkering with my TSP. 2011 I was still putting it all together. By mid-2012, I started in my opinion to finally feel comfortable. Five years in the TSP and I still have a negative return of (1.41%) and that proves that you need to babysit and do your best to avoid double digit losses.
2008 - L2040- (31.53%) Mark (31.49%)
2009 - L2040 – 25.19% Mark - 22.91%
2010 – L2040 – 13.89% Mark – (3.99%) This is where my learning really started.
2011 – L2040 – (.96%) Mark – (3.92%) Still trying to find comfort here.
2012 – L2050 – 15.85% Mark – 15.38% I finally feel comfortable. But I know it is not perfect.
So this week was hard to watch and hard to ride down but when price made a confirmation, I bailed without a second thought. Time will tell if it was to late, right on time, or wrong all together. I bailed from the S-fund and moved that money directly into the F-fund. The C-fund never fired a sell, just a warning, and therefore I rode it out. Today we got a pop and I got the C-fund pop. The Bonds trailed just a little bit and that didn’t hurt at all. You can see my numbers above, but this weeks move reduce my YTD 3.23%, ouch! Still I have to smile with a YTD of 8.01%. So let’s look where we are and let’s also pretend that we are brand new looking at the charts and see if the say stay in, stay out, or do nothing.
Forget everything that happened this week and look at the chart above with a clear mind and this is what you have. The S&P 500 fired a warning and just as quickly recovered and now it looks no worse for the wear. Price is safely inside the bull flag, above the 50 day moving average, above CBL and above the intermediate trend line. Would I get in the C-fund if I were outside looking in today, nope. I also would not bailout, so riding is approved until give a reason to pull out. I will say this, seeing that the CBL, Trend, and 50 day are all merging to one spot Monday or Tuesday, something is going to have to give soon. Waiting to see the show.
The small cap above is where we might have had a head fake down this week but it is also price talking to me and telling me it was time to get out. Thursday confirmed the sell signal on Wednesday by staying below cbl, trend, and 50 day, so I had no option but to bail. Friday I expected prices to go up because of how far down prices had fallen the last 5 days and we were oversold. What I didn’t expect to see was the formation of the pivot low. A pivot low is a indication that price is going to reverse back up for at least 3 to 5 days before leveling out or making a pivot high and reverse. Don’t worry about all that, let’s look at what might be the difference between this pivot low and the last two.
You do not even have to go back in time, because some of the information is right on the chart. Look at the last two pivot lows, they are still above the 50 day moving average and intermediate uptrend line. Look at the newly formed pivot low, it is below both and below the last CBL. A lot more damage was done this time to trend so a move had to made. I will not make a prediction on where price might go, but it’s hard to argue with a pivot low. Time will tell us everything we need to know, but here is my problem. If price starts back uphill, how do I get back in? I really need at least a short term down trend to give me a clue. I will a second pivot high to draw a downtrend line and if you look at the chart that white sign showing the high price is the last pivot high. It’s going to take a little time and watch price movement here. Still didn’t answer the question, what if price reverses and continues higher?
Ok, if you look at the chart above and we just use the CBL re-entry line, that would put us 5 days back on this chart. That gives us a re-entry price of $820. I think that is just to early to know what is going to happen and the next fact is bothersome. That last pivot low was lower than the previous pivot low and that is throwing out some yellow flags. Like the International, right now this index is a mess.
The hardest thing to do sometimes is to believe what you see when you know in the background things are screwed up. The International index most of us are scared to invest here. But the more time goes by the better this index is looking. Thursday and Friday of this week it tested the newest short term uptrend line and then created a new pivot low. Price is above the 50day moving average also. CBL was tested and held. It is possible that this index is getting ready to roll again. Personally, still a little spooked by this index even though the last time I invested here, I made a little money.
Bonds just keeping moving up little bit at a time. This index should never move real fast in either direction or make big percentage moves, but it does hold the hope that it will make more than the G-fund. Taking out the 200 day moving average could happen soon here and that always helps bring more long term investor to the index.
Some thoughts and conclusion:
All the drama this past week was in the Small Cap but most of the other indexes got punished to. The difference is that the Small Cap made some definite moves that would indicate that in the near future we are going to rollover. I will be very curious how we open up next week considering some of the underlying factors that I see that I do not normally report here. I have one stock left in my portfolio and I should have sold that. This is always a good indication to me that the market has changed for the worse and things could get ugly. a lot of the indicators like DMI and Stochastic that I do not normally use or report on, look very negative even after the move Friday to the positive. The Sector Select ETF’s, which there are nine, 7 look to be in a downtrend and the ones that are positive and climbing are the ones that traders turn to for safety, Utilities and Staples. So there you have a lot of information to consume and charts to read, but all in all, I think it is time to just sit back and watch see what happens.
I hope the remaining part of the weekend is good to you.
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