Good Evening
Despite my personal opinion that the US economy is improving and we are entering healthier financial situations, both at the individual/personal level and also at the corporate, government, and political levels, the market continues to challenge my sanity and ability to sleep at night. It appears that this is associated to emerging market fears, a downturn in China manufacturing (who manufactures goods for the US), and the QE reduction. But at the end of the day, I react to the market itself.
Today, it traded lower on increased volume, reflecting yet another Distribution Day within a span of a few weeks. In addition, the SP 500 has made no progress up towards its 50-day Moving Average, instead closing lower today, than it has any other day during the entire month of January.
Observe that the January Barometer, with two days left, basically has no chance of “going positive” for the month and with a 90% accuracy rate (I am happy to have it inaccurate this year, but….), the crystal ball is forewarning a flat or down year. Yes, I hope I am wrong.
For the above reasons, I am trying to set my emotions and personal convictions aside and respond objectively to the market itself. Quite frankly, I confess that I am running out of excuses for the market and the reasons to stay in stock funds are nonexistent. I have a picture of a duck, and I am turning it on its side, flipping it upside down, looking at it with one eye closed, changing the lighting in the room, and I just can’t make the picture not be a duck.
The market may indeed rally up in a few days or display some up days, but in the grand scheme of things, a possible new downtrend is potentially in the works. If correct, this will take many weeks to form, then typically break hard down, and continue down for multiple months or longer. Tonight, I submitted a request to change my TSP Allocation to reflect 100% G-Fund. Please see FAQ #10 regarding exactly what I do when I make a change to my TSP Allocation.
This allocation change will prevent further account damage and in the event of a severe stock market break downward, those in G-Fund will be protected. The FAQ on this free site discusses my investing strategy, I have had some new subscribers (thank you for signing up) asking me multiple questions, most of it is answered on the FAQ.
Please be familiar with the disclaimer section and that how your manage your TSP is up to you. I think everybody “gets it”, so with legalese aside, I am moving to 100% G-Fund.
Thanks guys, talk to you soon…
– Bill Pritchard
