Good Evening
I apologize for the chimes on your Blackberry as you receive this update, late at night, however I felt it was important to send this update out. Please note, my TSP Allocation has not changed, yet. With that said, today the SP 500 indeed penetrated downward thru the 1790 level, which was the low of the previous session, reflecting a continued downtrend of price action. Fortunately, volume was lower than the prior trading day, which serves to temper my concerns, somewhat. After hours, the Dow Futures and SP 500 futures were trading up, having found support and not trading below the day session’s lows as of 1AM Eastern Time. See charts:
This act of resilience by the indexes provides me with some optimism that the markets will not go down without a fight, and I am not changing my current TSP Allocation (not yet). Observe my prior post, in which I discussed that perceived problems in Argentina and international markets have caused some panic selling by institutional investors. In addition, it appears China is having some issues, combine this with the FOMC meeting this week, and the unknown statements on Tuesday’s State of the Union address, and it appears the markets are overly nervous.
NOT good, is that Apple Computer stock dropped 8% in after hours trading, due to disappointing sales and revenue outlooks. This is a huge drop, as Apple is a large-cap stock, and a member of the NASDAQ 100. You can fully expect that the market action on Jan 28 will be dragged down by AAPL.
No matter what happens this week, it will take a miracle to kick the month into a “positive month” in which we have a positive, and not a negative, percentage return. With that said, if you subscribe to the January Barometer theory, as I do, the calendar year is not looking good for trading. That may be reason alone to reduce exposure to stock funds and move partially to the G-Fund, as this is based on documented historical data, not hocus pocus or complicated economic theories.
Next up this week is the FOMC meeting, State of the Union address, and observing how the market absorbs the AAPL news.
My TSP Allocation remains 50% S-Fund and 50% C-Fund.
– Bill Pritchard
