It’s hard to believe that May 2016 is here, but here we are. We have a new monthly long term buy signal in the Small Cap, which we in the TSP world know as the S-fund. We had no change in the long term signal in the S&P 500 or Bonds as they remain a long term buy. The International was close to firing a buy signal but by a few cents it did not make it. Then we have the daily charts and what they are saying as of the end of the week and month of April. To say I do not feel very confident in the near term future is putting it lightly because of the long run up in prices with not much of a pause. Last year, the month of May was a positive month in every index in the TSP except the International. I made the move Friday and went into the S-fund with 33% of my funds and reduced my postion in the C and F funds to 34 and 33% respectively.
We have another BullFlag in the S&P 500 and we are currently at the bottom of that channel and it appears we will break out of the bottom of it as of Friday. That is a bad sign because 75% of the time, we breakout to the high side when a BullFlag forms. We are also sitting right on top of the CBL and if price slips below that level, we would have a sell warning. Keep in mind, that would be a short term daily sell signal. The last little thing that concerns me is the another early warning of the DMI flipping from positive to negative. The red line crossed above the green line and that normally means lower prices. Lastly, the overall structure of the current price levels in the S&P 500 still look good but we could be entering a short period consolidation of the run up in prices since February 12, 2106.
The Small daily chart did create a higher pivot high which short term means lower prices. Structure wise it is perfect part of an uptrend. Think of it like steps in your house. Higher pivot lows and higher pivot highs is a good uptrend. Price is current also very close to the first warning sell signal by closing below the CBL. The CBL and monthly level are exactly the same at the moment, so the CBL this time is the purple line. Normally I mark the CBL in red for the sell level and green for the buy level. So, we kind of have mixed signals here but we are going with the trend. No bullFlag has been formed yet because price has only nosed over one day. We just sit back and watch the Small Cap and long term investors, monthly, do not even care.
The International daily buy signal is still good. We have a BullFlag that is very easy to see. Another week of lower prices here could put a lot of pressure on sell signals. We still do not have any long term positive signals yet on the International, so I will stay away from this index for now.
Bonds appear to ready to resume their upward prices. We did have 2 days last week where we fired a CBL sell signal, but the last 3 days of the week cancelled those signals.
Conclusion: Lot’s of mixed signals going on between Daily and monthly charts and that is why it is so hard moving retirement money, long term money, based on daily charts. I will sit back and ride my decisions until the end of May and trust that the long term charts keep me riding the wave uphill.
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