The Small Cap and S&P 500 canceled each out this week, but the International came in and saved the week. This makes the first few days of November a positive start to the month. My new 12 month PIP is posted upper left of the top chart. That is a once in a lifetime PIP. It is destine to go down next time because all you have to do is read that top chart, look down the Nov2016 column, and you will see a 6.31% for myself and that’s going to be difficult to surpass. I’ve had an exceptional run the last 12 months with one negative month and that was .05% loss. The monthly moves have done well the last 12 months. Now to the charts.
The S&P 500 made new all time highs again this week. This slow grind higher is my favorite type of move. There is no drama. Volatility is low which is positive. The DMI is also positive. This is the type of grind we like and we ride.
The Small Cap was suppose to be on a breakout run for another 70 points. That breakout was 2 weeks ago and we have yet to see any follow through to the high side. This is concerning too me. It is possible that price is just consolidating before that big run up, but it needs to make that move soon. If we are doing the same thing by the end of next week, I would expect this breakout move to fail and lower prices will ensue. It also appears the short term uptrend is beginning to break down. This is not as important as the long term that is undeneath it, so for now we ride and wait to see what happens next week. No matter what happens, it just an indicator that things could be changing. No official move will be made by me until the end of the November.
The International broke out of it’s small bull flag that formed last week. I say small because the pole is only 1.68 points. That takes us about another .90 cents higher. I’ll still take that move. What you cannot see on this chart yet is the overhead resistance that is sitting at $70.79. That dates back to June 2014. Price might pause there, but I have my doubts. That was so long ago that I doubt the price will have a memory of those levels. The only thing it means is that we are close to making new highs that date back to 2014. Notice I didn’t say all time highs? That’s because that level is $88.71 and dates back to 2007. So we still have work to do here. The International so far has kicked butt in 2017 and we will continue to ride.
Bonds flattened out this week and appears to be making another attempt to end the down trend. Volatility is still low which is good. DMI is still negative. Not sure which direction Bonds will take, but I see no reward in taking an early position here eevn if I wanted to take a chance. This is just a watch for a trend change.
Conclusion: November got off to a good start this week. I still expect a that this long run in higher prices will end eventually and sooner than later, but since I cannot predict the future, I will ride this trend until it changes.
I heard from one of my younger followers here this week and they told me that at the retirement seminars they were pushing ROTH’s. I want to make sure that you understand something here. Now I could possibly be wrong because I do not know everything and sometimes things change and I miss them. If you are and ATC FERS employee and are forced to retire at 56 years of age, be careful investing in a ROTH inside the TSP. Why? There are no special rules put out by the IRS that cover you from 56 to 59.5 for ATC retirees. So what does that mean? You will pay a penalty for 3.5 years if you withdrawal any funds from your TSP. And to answer you next question. No, you cannot tell the TSP folks to pay you out of your traditional 401K side instead of the ROTH. If you make a withdrawal from your TSP, they will take 50% out of the Traditional side and 50% out of the ROTH side. You will pay that penalty, which I think is 10%, on the ROTH side until you reach the age of 59.5. So my suggestion to you if you want a ROTH, is find one outside the TSP. There are many benefits to ROTH, just make sure you understand the withdrawal rules if you are ATC and forced into early retirement.
If someone has a different point of view or knowledge of the ROTH rules for ATC inside the TSP, please post them here and educate us all. I would appreciate it.
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