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
