Hello folks
I hope everybody returned from the Thanksgiving holidays safely. We are now into the month of December, and unfortunately the markets have started the month on a weak note, closing down on both Dec-2 (Monday) and Dec-3 (Tuesday). Rudolf’s pleasant jingle bells (does he have jingle bells ?) and Santa’s jolly laugh have failed to start. Maybe it is too early yet. Typically the first day of the month “sets the tone” for the rest of the month, so I am going to ask Santa to bring us some Holiday Cheer, if I can find him at the mall.
The SP 500 Index has departed the magical 1800 area, to the downside, and recent support is found at approximately the 1790 area. In other words, any behavior below that is undesirable. Today, Dec-3, the index displayed above average volume, while closing down, a “red flag” but not reason for total panic. If we get multiple days like this in close proximity to each other, it may be a G-Fund Christmas instead of a white Christmas. But lets standby for now and take a look at November’s TSP returns. See image below:
As can be seen, the C-Fund (#1 monthly performer) out powered the S-Fund (#2 performer) in November. However, YTD and Last 12 months, S-Fund is still the leader in performance. Since October until present, C-Fund and S-Fund have been running close to each other, and my TSP Allocation is 50% S-Fund and 50% C-Fund at the present time. I will advise anyone if this changes. Out of ten fund choices, my system has put me into the top performer almost the entire year, and when not in the #1 performer, it was in the #2 performer. So all year its been Walter Payton or Tony Dorsett. Either one on your team and you are with a winner. Note that I was in G-Fund for short bursts during the year, due some red flags (since proved false alarms) to my admitted fear of market crashes and account balance wipe-outs.
Once again, I watch the market itself, for signals and red flags, and respond to those signals, and hesitate to speculate on reasons behind the moves. With that standard disclaimer, it is my opinion that the fears of a reduction of the Quantitative Easing (QE) program are back in the air.
Also, the recent reports of Black Friday Sales being less than last year’s, have sent fear into the market. Some Wall Street folks however might take note that while Black Friday was worse than last years, the folks who did not go to physical stores (Black Friday data is based on that) to shop, instead spent time on Amazon and other sites, ordering items. One might observe that NetFlix basically put Blockbuster’s physical stores (and the company) out of business, when folks could stay home and save gas and avoid driving to Blockbuster only to find that their favorite movie was out of stock anyway. Amazon (a few years ago it was mostly books) is credited with putting Borders Books out of business, and is presently giving my personal favorite hang-out spot, Barnes and Noble, a lot of heartburn. Amazon (and other online retailers) are now challenging other old-school stores. Unless you just want to get an Orange Julius or an Aunt Annie’s pretzel, why would anyone drive to the mall, burn gas ($4 a gallon), fight the crowds, park the car one mile away, only to find out that Grandma’s sweater size is not in stock. I don’t. Both last year and this year, I accomplished all of my Christmas shopping, to include physical gift wrapping, for my family and relatives, in multiple areas of USA, in one day, while in my pajamas. Yes, that means it is December 3, and I am already done with shopping. Any shipping costs (typically free if you order a minimal dollar amount) or sales tax that I had to pay more than offset the high PITA Factor (Pain In the A** Factor) involved with shopping for Christmas. Note that most of the items were priced less than the same item in the actual physical stores. I mean, I didn’t even have to get dressed, much less, leave the house. Thank you Jeff Bezos.
With that said, ok, Black Friday’s numbers were low. Is the world ending ? Many “bears” on Wall Street would like to claim that. We are all trained investigators, what do you think ?
Lets take a look at the most recent SP 500 Chart (first image). I realize we are only two trading days into December, but I wanted to post it anyway. Observe that today the index closed lower (QE Fears and poor Black Friday / Aunt Annie numbers ?) on above average volume. Which is undesirable. Also, it is noteworthy that the evening SP 500 futures (white colored chart below) are trading up, and “found support” in the 1790 area, at least as of 9PM Central Time. In other words, the low’s of the daytime session (which coincides with the daytime stock exchange session) were not violated, and the index is trading much improved during the evening session. Charts/Images:
As a wrap-up, please FYI that Dan Jamison, of the FERS Guide, is retiring from federal law enforcement service after 21 years, effective Dec-4 2013. Not surprisingly, he will utilize his extensive retirement planning knowledge in his retirement career. Today, he released his most recent guide, which is posted under the FERS Guide link on this site. Dan produced and authored all material himself.
Thank you for reading and if you find this site informative or useful, please share it with your friends and coworkers. Thanks and talk to you soon.
– Bill Pritchard
