Published March 31 2015, 11PM Pacific Time
Hello Folks
Well the first quarter of 2015 is behind us, and my preliminary data shows that the S-Fund was the top performer for March, followed by the I-Fund, then C-Fund. This is my own personal assessment, we need to await TSP official results for the “real” info.
The Dow Jones Index is negative for the first quarter, the SP 500 and NASDAQ are slightly positive, but not much. This has been a turbulent quarter. I remain in stock funds only because my assessment reflects that the underlying economy and “structure” of things appears solid. Fed Rate jitters abound, to some extent (or to a large extent) magnified by mainstream financial media. Richmond Fed President announced a few days ago (thankfully the FOMC is multiple people) that a “strong case” exists to raise rates. However he appears to not be paying attention to the very data that Ms. Yellen stated was important, namely the PCE Inflation data, which is still lackluster. I repeat my manta, without BOTH PCE Inflation Data and the Jobs/Labor data (which yes, is where it needs to be), we will not see a rate hike.
I am disappointed to report an increase in “Distribution Days” on the SP 500 Index, this is a concept pioneered by Investors Business Daily (IBD) newspaper reflecting “sell off” days in the index, or outflows of institutional money. Numerous days can change the direction of an index and send it into a downtrend. We indeed have had numerous days, and the IBD Accumulation/Distribution rating has fallen from a prior “B” to a current “C” (worsened) as of March 31.
Lets take a look at the recent SP 500 chart:
As seen, it is apparent that the index is “range bound” with 2040 being the support level and 2120 being the overhead resistance level. So we need to keep an eye on this, and anything below 2040 is a red flag and is undesired. Also note that (based on my chart settings) we have had below average volume on most days, with two recent above average volume distribution days.
Unfortunately, Equities Index futures are trading drastically lower in the March 31 evening trading. The Dow Jones futures are 100 points to the negative, which is reflective of a possible challenging day in the regular stock markets when they open for trading on April 1. Chart:
It is my opinion that if we can keep market fed rate jitters to a minimum, keep ISIS and beheader Jihad John off Twitter and cable news, and keep airliners from mysteriously crashing or disappearing into the ocean, the market could do very well. In addition, we have “Quarterly Earnings” reports coming out in April, and the below companies arguably can represent what is happening with the larger economy, so we need to pay attention to them:
AAL – April 24 earnings release
UPS: April 28
AAPL: April 27
JPM: April 14
XOM (Exxon): May 4
GM: May 7
I remain 100% S-Fund at the present time. However ultimately, we must react to the market itself, so it is important we monitor the action on the indexes and keep an eye on 2040 on the SP 500. As I stated above, April 1 regular market trading may be a challenging day. Allow me to be direct: The market is displaying weakness and a move to G-Fund may be looming ahead.
That is all for now….if you find this site informative please share it with your friends and colleagues. Thanks for the numerous great emails, I must say I am quite impressed by the subscriber growth so far.
Thanks and talk to you soon…
– Bill Pritchard
