We had a very good first week of 2017 and one can only hope that this trend runs for a few more months. Something new on the big chart above in that, it shows my current PIP in the upper left corner. I will update that box each time the TSP website updates the PIP for everyone.
Not only did the S&P 500 daily have a good week this week, but structurally it made an important move breakout of the bullflag to the upside. Yes it could still fail if price doesn’t continue up next week, but what I expect to happen is for the S&P 500 to go up another 91 points. It’s based on a measured move. That would be another 4%. We also hit a new all time high and price normally continue higher for a few more weeks after a new all time has been hit. Volatility is low and falling. The DMI is spreading to the positive and green is even on top of the blue line which is doubly good. 50 day moving is trending up. Everything here looks positive at the moment, so we sit back and watch.
The Small Cap daily also broke out of the it’s bull flag this week. It doesn’t appear to be a very strong and convincing breakout. What I expect to happen here is we move upward for another 51 points before we could expect a pause or pullback. That should take us up to $1236. That would be another 5% gain if it works out. DMI has a positive spread and volatility is falling even though it doesn’t show on this particular chart.
The International made the strongest move this week and according to this chart a 2.29% move up. Our I-fund only moved up 1.77%, good, but still confusing. Volatility is low. The DMI spread is positive but may be over cooked and is a sign prices once again may pause or reverse. I buy daily signal was fired on Thursday but it didn’t confirm on Friday. The new short uptrend looks good at the moment but hasn’t been tested since it was drawn. Next what needs to happen is price goes no lower than $57.83 to keep the trend intact and fire and confirm a buy signal.
Something that normally always happened with the 3 charts I watch for each index, the daily always fired a buy signal first, followed by the monthly, and then the weekly fires last. Well look what happened at the end of this week. See the chart below.
So there it is, the International fired a weekly buy signal Friday. Will it stick? Is this a sign of a longer term trend to come? See that overhead resistance that dates back to April 2016? Well if the International index can punch through that, this might be a real thing. The last weekly buy signal, and you can see that by looking for the green arrow to the left, failed. The Weekly DMI at the bottom of the chart is indicating that this move might be real.
Bonds made it’s best run in a very long time with almost 7 days uphill climb. Price did cross above the buy CBL line, but still has to get through the 50 day ma. I’m just not sure that this is really a reversal. Volatility is really high, which would indicate to me that things could reverse hard also. 50 day ma is sloping down. The DMI is turning positive but it doesn’t really look that strong. This is a watch but a long way from a long term buy.
Conclusion: Things have started off nicely for 2017 and we can only hope that maybe this year will be one of those screaming 40% plus years. The Trump presidenecy that will begin soon, is a wildcard. Hopefully no matter what effects the markets it will be a slow gradual thing instead of much drama. I say based on the first week, we ride the C, S, and maybe the I, and stay away from Bonds.
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