Monthly Archives: December 2012

Dec 30 2012, 8PM CDT Update

Public news media is reporting that no Fiscal Cliff agreement has been reached, and talks will resume at 11 AM Eastern time on Monday Dec-31.   If this is not resolved by Jan-1, I anticipate a negative market response with a strong sell off and decline.

Lets take a look at the SP 500 Index chart.  You will see a drop in the index on Dec-21, along with above average volume, which is indicative of distribution or selling in the index.  The above average volume is double-worrisome, because the markets are historically low volume during Christmas week.  In other words, we had a historically low volume week, but on Dec-21, we still had high volume coupled with a downtrend.   The following days the market continued lower, albeit on lower volume.

Lets take a look at the SP 500 futures, which trade into the evening, after the regular stock markets close.  You will see that the market sentiment continued, with a downtrend in the futures.

As of now, 8PM, the SP 500 futures are at 1389, which is not much different than Friday’s performance.

Lets see what shakes out between now and Jan-1.   I am personally 100% G-Fund, my TSP balance is not exposed to any volatility or damage which may occur.

Thank You

Hello

Monitoring the news media, there is no agreement yet on the resolution to the Fiscal Cliff situation.  The Washington Post has reported that an unofficial deadline is Sunday Dec 30 at 3PM Eastern Time.

“….Reid and McConnell have set a deadline of about 3 p.m. on Sunday for cinching a deal. That’s when they’re planning to convene caucus meetings of their respective members in separate rooms just off the Senate floor. At that point, the leaders will brief their rank and file on whether there has been significant progress and will determine whether there is enough support to press ahead with a proposal.

“They both know the clock ends Sunday,” said Sen. Mark Begich (D-Alaska)….”

With that said, we are almost one hour from that deadline now (I type this at 1:50 PM Eastern time).  The SP 500 futures are not trading yet, but will trade this evening electronically.  Worldwide traders have access to the SP 500 futures, and these are extremely reliable indicators of “sentiment” and response to market forces, such as the Fiscal Cliff situation.   It will be interesting to see how they trade tonight.   They closed on Friday at 1388.

I will update everyone tonight.  Thank You

Bill Pritchard

Dec 28 2012 / 5 PM CDT

Fiscal Cliff and your TSP

I will post more in-depth information at some point this weekend… the SP 500 futures (which trade into the night) have basically crashed 22 points down this evening.  This past week’s stock market activity have been reflective of a pending downtrend.

In short, the followers of this website ideally are already 100% G-Fund, thus protecting their balances from any market crashes.   Remember, in this market environment, balance protection, not gains, is the priority.  We can worry about gains later, however gains cannot be made on a zero account balance.

I will post additional information in the next 24-72 hours.  Thank You

Bill Pritchard

Merry Christmas and Happy New Year to the followers of The Fed Trader !

Bill Pritchard

Hello from Wichita KS airport and free wi-fi

The fiscal cliff negotiations have broken down and now, everyone returns to the table after Christmas. Observe that Dec 31 is the deadline

last night, SP 500 futures went down 20 points, which is a huge move down. Today, Dec 21, I expect the market to go down, likely severely.

hopefully most followers of mine are in G Fund and thus their balances are not exposed to this potential damage today.

Thank you…I wanted to get that out there….I will monitor things and update as we get developments.

I am 100% G Fund for now

– Bill P

Hello to all

This past week the markets flashed some signs of optimism, and penetrated the 1425 level on the SP 500, which I had previously discussed was the “resistance level” for the index.   See chart below

This occurred on Dec-11 and Dec-12, likely a positive initial response to the FOMC meeting and the fact that the International Monetary Fund agreed to additional aid payments to Greece (“publicly announced” on Dec-13).   On Dec-12, in the morning, it climbed steadily and hit 1438, a new recent high over recent months.   Absent additional information, this would be good news, having successfully punched thru the 1425 level.  However, after the FOMC’s intentions were disclosed, the market quickly “sold off” and went lower on the afternoon of Dec-12.   As of Dec-14, the last trading day of the week, the index has not recovered.   Please see below 3-day chart, showing minute-to-minute “tick data” of the SP 500 index

Based on the above market behavior, and the inability to stay above 1425 for very long, I am still in G-Fund.  Lets remember that midnight (or 11:59PM ?) on Dec-31 is the deadline for the Fiscal Cliff issues to be resolved.  After that passes, mandatory tax hikes and other things go into effect.  Obviously with negative market consequences.  As a reminder, during Christmas week, very little volume will occur in the markets, as most money managers and traders will be off during that week.  Any market moves that week (up or down) are questionable, as without sufficient volume, they are untrustworthy.

100% G-Fund for now.  Thank You

Bill P

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Good Evening everyone

I have updated multiple sections of this site, to include an “About” section, which provides some insight into my biography, including some of my published works regarding the financial markets.  Also, I have revised the “Disclaimer” to ensure that it is clear and understandable.   I have installed a LinkedIn badge in the event anyone wants to take a look at my profile over there.

Once again, “Thank You” for the interest in the site, and if you find the site useful (or at least entertaining…) , please tell your coworkers and buddies.  Most of this sites readership comes from word of mouth and networking, and I am happy to try to provide this service, “from one of you, to one of you”.   Again, thank you.

Markets:

Now on to the more serious stuff.  Since my Thanksgiving update, the markets have had three (3) days of accumulation, which means that due to volume behavior and price behavior on the indexes, it is probable that large institutions are buying stock and accumulating positions.  These days occurred on Nov 16, Nov 30, and Dec 5.

A glance at the SP 500 chart shows that the index is having a hard time breaking past the 1425 level.  It kind of almost reaches it, and goes lower again.   My confidence would be a lot higher once it goes past 1425.  See chart image for visual explanation.

Which causes me to arrive to this conclusion:  The markets are still not in full Rally mode, and thus I am still in the G-Fund.   The biggest speed bump in front of the markets is the Fiscal Cliff situation, which I am hesitant to roll the dice and bet my TSP balance that it will be resolved soon.  Greek is still a problem, although I think everyone is so sick of Greece that it is “priced into the market” at this point.

Summary:   Still 100% G-Fund

Bill P