Monthly Archives: February 2015

Hello Everyone

I am happy to report that this past Friday the 13th, while historically a day associated to bad luck and horror movies, turned out to be a positive day as far as the markets were concerned.  The prior All-Time-High of 2093, set back in December, was overtaken, with the SP-500 index reaching 2097.03.   Then on Tuesday February 17, the  SP-500 index reached a new high of 2101.30.

Note that these both occurred with the Ukraine “cease-fire” apparently not being entirely adhered to (surprise), and with the Greece situation still not resolved.  Open source news is reporting that Greece may ask for a 6-month extension to their bailout terms (another surprise).    So with both of these things in the picture, it appears that the markets have “priced in” these events.    Lets take a look at some charts of the SP-500 and NASDAQ.  Observe that in recent days, the NASDAQ index has displayed stronger volume and overall behavior than the SP-500.    This could be due to recent strong performance in NASDAQ stock sectors of cyber and IT security and biotech stocks.    Ok, lets look at some charts:

I currently remain 100% S-Fund.  I hesitate to change fund allocations until I get a better “handle on” the various fund’s apparent future performance.   Anyone who tells you “move to Z-Fund, it is doing the best, get in early” should be ignored.   In times like these, after an extended sideways market (since basically November), at the present time, nobody can tell you what the individual funds are going to do.   I my prior post I discussed three floating swimmers on their back.   In this post I will use another analogy (I am a big analogy guy…), and state that the three TSP funds (S/I/C) are like three baby birds that just broke thru their shells.   Which one will fly the farthest?   No way to determine that right now.   With that said, in 30 days (mid-March) we should have a better idea on what fund is performing best, which may provide insight into TSP allocation decisions.  

On Wednesday February 18, the Federal Open Market Committee minutes will be released, at 2PM Eastern Time.   These are the minutes from the January 28 FOMC meeting, and everyone will be over analyzing every word and vowel in the minutes, trying to determine when interest rates will be raised.   I remain committed to my prior opinion that we will see rates increase in summer/fall 2015.

Again, I remain 100% S-Fund (a fine allocation, 50/50 S-Fund and C-Fund also fine).    In mid-March, I will take a look at all funds and other relevant information for a potential TSP Allocation change in my account.

Please forward this update and this free website to your friends and colleagues, so that they too may benefit from trustworthy and accurate market analysis.   This free site’s sole purpose is to educate and inform the TSP participant, with the belief that the educated participant can then make educated decisions, with a resulting positive performance enhancement to his TSP.  As a fellow TSP participant, I have “skin in the game” along with you, and try to put out the correct balance of opinion, commentary, and analysis, without getting overly complicated or burying the reader in obscure economic theory or reports.  

As we enter 2015, I have made a very conservative estimate that my ever growing multi-thousand subscribership represents a total of over $300M in TSP account funds.  By all appearances, this site has been received very well.

Thanks for reading, talk to you soon…

– Bill Pritchard

Hello Everyone

This update will be rather short, however I am happy to report that the markets appear to be recovering.   On Feb-12, the SP 500 Index “broke thru” the overhead resistance area located at 2080.  As most know, the index has been range-bound 1970 to 2080 since January 1.   The next overhead resistance is at 2093, which is the All Time High achieved in December 2014.   However I have shifted my outlook from “worried” to “optimistic” as of now due to this recent penetration of 2080.  We are “off the lows” (see charts below) in the 1980-1970 area, which is positive.

Some back-drop news likely accounting for these moves is the reported cease-fire reached in Ukraine (note “we have seen this before” however) and some speculation that Greece and Germany, the country with the biggest exposure to the Greek bailout package, may be reaching some sort of agreement.   I have reported previously on this site regarding the Greek situation, I will not re-hash that reporting, however per internet news sources, the “drop dead date” for the newly elected Greek government to have some sort of resolution to their bailout program is February 28.   So between today and February 28, we may still see volatility in the markets.

Note:   There is some argument for a possible move to I-Fund, IF the Greek situation is resolved, and IF the Ukraine cease fire appears to hold.   If stability returns to the international picture, the I-Fund may begin to “take the lead” over other funds.  This is merely speculation on my part and by no means would I try to “get ahead” of the possible I-Fund recovery by investing in it today.   I would not make that move yet.  Lets monitor things a little longer. 

My preliminary analysis shows that the C-Fund is leading this past week, then S-Fund, then I-Fund.   It is very difficult to pick out “the winner” when all contenders have been range-bound and volatile.   This is akin to three swimmers in a swimming pool with choppy waves, floating in circles, on their backs.  “Show me the fastest swimmer”.   Very hard to determine that under those circumstances.  However, on a preliminary basis, C-Fund is leading.   I remain 100% S-Fund presently until we get a little more insight into the market’s direction. 

Note, as discussed on this site previously, when large cap stocks (C-Fund) consistently lead all other stocks, this is reflective of a mature “long in the tooth” bull market, a market which may be reaching the end of the bull cycle.  

Here are some charts, first with no comments, then one with comments:

Note that Monday February 16 is a Federal Holiday and the stock markets will be closed.   Friday February 13 trading volumes may be light in the markets due to the long weekend.  

I remain 100% S-Fund at the present time.   Lets monitor things; ideally the SP 500 remains above 2080, if it drops back below that, the strength we saw today may be short lived.

Thanks for reading, talk to you soon….

– Bill Pritchard

Hello Everybody

I apologize for the lack of updates in January, I received a few emails asking if I had disappeared.   No, I am here, however I don’t think the bull market is here much anymore, at least if we go back to November 2014 until present.   The market has been a ping-pong ball for the entire month of January, hence I have had no actionable ideas to execute or report.   Sadly, we may have a move to G-Fund looming in the near future.

Using the SP 500 has a benchmark, that index has traded in basically the 2080 area (overhead resistance) to the 1970 area (support) since November and December.   It has ping-ponged up strongly on some days, then on other days crashed hard….only to go back up the next day.   This kind of behavior is very difficult to respond to, much less predict (aka crystal ball).   Since a “picture is worth a thousand words” lets look at three charts of the SP 500:

As can be observed on the charts, the SP 500 displayed its last gasp of bull-life on December 29, when it hit an All Time High of 2093.55.   However, unfortunately, it sold off hard the first two weeks of January, and January closed down 3.07% (that is –3.07%). 

I have reported previously on concepts such as the January Barometer , with a reported accuracy rate of 88%.   This concept states basically that the market will perform for the remainder of the year, as it performed in January.   A down January ?   A down year.  An up January ?  An up year.   Yes, naysayers exist but I have not been one to listen to naysayers.   With that said, I see more “bear signals” than “bull signals”, which are:

• The aforementioned January Barometer with a –3.07% January
• Numerous “Distribution Days” on the indexes over recent weeks
• Almost guaranteed interest rate hikes summer/fall 2015
• (No surprise) international issues such a Russia downgraded to Junk credit rating and new political power in Greece

My finger is close to the G-Fund “trigger” however at the present time I will remain in S-Fund.   Due to recent market swings, it is very difficult to out-guess or respond to the index, and will remain “in current position” (S-Fund) until I get better information which may cause me to move elsewhere.   All stock funds lost money in January 2015, based on my data, FYI.  We get two moves in the TSP funds a month, so for now I am standing by.

For now, lets monitor the indexes (don’t let the Dow scare you, it is only 30 stocks, but makes for big media headlines), the key levels for the SP 500 in my opinion are 2080 to the upside (and ultimately 2094 an beyond) and 1970 to the downside.  If we get close to or below 1970, coupled with how the volume is acting, and “backdrop” (news, world events, etc.) information, this may trigger me to move to G-Fund.     

Again, I am presently 100% S-Fund and may move to G-Fund in the near future.

Thank you everyone

– Bill Pritchard