One more half decent week and I will have finally and painfully craweled out of the hole for 2016. I did my best digging my hole and not following my monthly moves, but I’m firmly planted now and making them as I call them. At the end of August I called for a 4 way equal distribution in the primary funds and I made that move as you can see below.
This time last year is where my pain in the TSP started and the markets just kicked my butt. Last Setember I had a 3.01% loss for the month, got a small repreive in October and then 4 straight months in the hole. Let’s hope that the monthly moves instead of the Mark is smarter moves give me a better return the next 6 months.
Absolutely no change this past week int he S&P 500. We are still in the same channel and still grinding sideways. This will break for the good or bad soon. Things that stack up in our favor is that Implied Volatility is low and falling again. Also the DMI at the bottom of the chart is turning positive again. The thing that could work against us is that the longer this index takes to break to the upside, the more it will fall.
The Small on the other hand just made a new 2016 high and both the short term and long term trends are solid and holding. The long term overhead resistance for the Small Cap is $1141 which is the last all time high mark. That dates back to June of 2015. That point in space is still 3.8% away from current levels. All looks solid here and we can only hope that it drives the markets higher. There is always a leader.
Bonds are starting to really look tired on the daily chart and due for a pull back. Since things here move at a snails pace, I can’t see much damage or risk to my overall setup no matter which way it goes. Everything with bonds on the daily, weekly, and monthly chart are so tight that even the smallest of movements can fire a buy and sell signals. Example, a monthly sell today would be a move of 83 cents in price to the down side or less than 1%. Not much drama there. So for now I will say we have a daily warning since the CBI and 50 day ma are under threat. Other things to note is that wedge mentioned in the past is coming to a point of decision, so I expect a move one way or the other soon. Things that look concerning is that the major uptrend line will soon be threatened if price doesn’t start climbing soon. That threat could be next week.
The International index we all know has been pounded and pounded hard since June of 2014. So a reversal is a long time overdue. You could have made money in the I-fund over that period, but your timing would have to have been almost perfect. Today it appears that everything is lining up for a new trend to the upside. The daily, weekly, and monthly charts all fired buy signals within days and weeks of each other. That rarely happens. The chart above shows the current zoomed in view and it shows price breaking out of the long term down trend line. It shows that for the first time in a long time the 50 day moving average crossed over the 125 day moving average and is spreading the gap. That shows a stronger than normal trend. The chart below will show a longer term daily view so you can see that the down trend line is breaking and it is still to early to pick out a new uptrend line on the higher pivot lows.
The next chart below this will show the next few levels that have to be broken in my mind to confirm that this trend reversal is real. Price has bounced off these levels at 3 times and not gotten through. So in the weeks ahead I would watch these levels closely. $60.17 to me is the key level because that will also be new all time highs for 2016.
If this is the sign for a reversal and a new uptrend for the I-fund, we got in pretty early.
Monday is Labor Day and the USA Stock market will be closed.
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