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Hello everyone

The market’s action this past week resulted in the streak of gains (six weeks worth) being paused.  This is not a big deal…July historically tends to be a lethargic trading month in the markets…our July 2013 gains were really a pleasant surprise.   Hence, this “pause” in the market’s uptrend is not causing me to lose sleep.

It is noteworthy to reflect that July’s gains (again, typically a lackluster month) resulted in the S-Fund being the top performer for the month, something I talked about in my July 26 post on this site.

It should also be noted that the I-Fund has indeed taken the lead over the other funds, a behavior which began approximately the last week of July and exists until now.  I am not going to change my TSP allocations yet, as I want to monitor this behavior a little longer, but it is something that we need to be cognizant of.   One could speculate as to why this is happening…some folks believe that the global economy is starting to strengthen, thus prompting some cautious investments in the foreign markets, and thus pushing the foreign stocks higher. 

The most recent trading week, August 5-9, was marked with some nervousness after Chicago Fed President Charles Evans’ Aug 6 comments, which signaled a possible scale-back of the Fed’s financial stimulus program.  The next Federal Reserve meeting is Sept 17-18, at which time we may see more clarity on that issue.  As discussed previously on this site, I consider the US economy a “sick hospital patient”, and as the patient recovers, it only makes sense to reduce the prescribed medications and various life support systems which are attached to the recovering patient.  Clearly some folks are worried if the patient will survive without medication and life support.  However, it is better in the long term if the patient learns to breathe on his own again.  

Let’s take a look at a 2 month chart of the SP 500 index, using “close only prices”, to see how things look.  I am calling 1685 on the SP 500 as our support level, as all the recent market closes seem to be at or above this.  I am happy to see that the SP 500 broke above the 1700 level, an area discussed in my July 26 post, as being a key overhead resistance area.  This occurred on Aug 1, Aug 2, and Aug 5, and returned to sub-1700 levels after that, largely due to Mr. Evan’s comments on Aug 6.   Let’s take a look at the chart:

In summary, I am still 100% S-Fund at the present time, and will monitor the I-Fund to see if a change is warranted in our TSP Allocations.  Note that August and September are typically the worst performing months of the entire calendar year, so any declines during August and September may or may not be a departure from typical historical behavior.

As always, if you find this site useful or informative, please share it with your coworkers and friends.

Thank you for reading

–         Bill Pritchard

Hello everyone

Just a quick note that things, as I see them, are in my opinion “ops normal” and I am 100% S-Fund in my account.  This week, my indications are that the I-Fund outperformed the other funds on a one-week basis, however I am not basing any trading decisions on this one week performance.  My data indicates that the S-Fund is the overall July winner (so far).

The indexes are reflecting “cautious” accumulation, in which more money is coming into the market versus money going out, with the NASDAQ (a tech heavy index with many up and coming companies), performing well.  I say cautious because July witnessed some down days…large investors are not jumping into the market with both feet.  In my opinion some Bernanke nervousness and other things are still in the air, affecting enthusiasm.

My charts of the SP 500 index reflect a potential Cup with Handle pattern forming, which is a pattern discussed by William O’Neil of Investor’s Business Daily, associated with bullish behavior.  The particular pattern underway now is NOT a perfect cup with handle, but in my opinion, it is closer to being a Cup with Handle than not being one.  Please see images below

Another observation that I have, is that the 1700 level on the SP 500 appears to be our new area of “overhead resistance”.  Any activity at, and above this, will  make the headlines as this is a new All Time High and the area of resistance.  The SP 500 hit 1698 on July 23 and July 24 than cooled off somewhat and came down from those levels.   Keep an eye out for 1700.

1670 is our support level and anything at and below this is undesirable.  On July 11, the Sp 500 had what I call a “thrust day” where its intra-day performance was much better than the prior days, with the index closing higher than the prior day.  This is akin to a person whose max bench press per workout is 200 lbs.   For five days he maxes at 200 lbs each day and on Day-6, he is able to magically bench 300.   The next few days after that, he is lifting 200, 240, 220, 205.  However you now know that 300 is possible.   That is what I see in the indexes.   Some one-day bursts of strength, a few flat days, another one-day burst, etc etc.  The summer months July-Aug-Sept tend to be lackluster, so I am happy to have July’s gains.

With that said, I remain 100% S-Fund in my account.   I will update folks as the situation warrants.   I ask that if you find this site useful or informative, please pass it to your colleagues and friends.

Thank you

– Bill Pritchard

Hello everyone

Arriving to the end of the first complete trading week after the July-4 holiday, I am happy to announce that the markets have closed higher each day, than the prior day, and are exhibiting the signs of a resumed uptrend.  The volume is not as high as I would like it, but the behavior across multiple days gives me the confidence to return to the S-Fund.   This week, the I-Fund actually outperformed everything else, but I am still a little skittish about the international markets in light of still unresolved issues internationally, such as Egypt, Syria, the Greece economy, etc.    If things settle down, I may be inclined to invest in the I-Fund.

No cool graphics today, just my opinion that G-Fund “safe haven” is no longer needed and it is safe to resume investments in the S-Fund.

Thank You.   Also take a look at the FAQ as I will be updating it over the next few days due to some good email traffic sent to me.   Lots of folks with great questions.

Thanks for reading….please share my site with your colleagues and coworkers if you find it useful or informative.

– Bill Pritchard

Good Evening

A very short update, as I want to see how this week shapes up.   On Monday, July 8, the market participants returned from the holiday with plenty of enthusiasm, sending the indexes up, on above average volume.  The SP 500 closed at 1640, which is an excellent sign, and ten points above our prior overhead resistance level of 1630.   July 8 price action resulted in a “gap” in which the low of July 8 was higher than the high of the previous trading day (July 5).  This results in a “gap” on the price chart.   This is a result of intense buying and accumulation, all of which are positive for the market.

Please stay tuned for another update later this week, as I want to see how the market does over the next few days.  However, this is a positive start to the week.   Lets keep our fingers crossed that it is not a one day fluke (I doubt it is…)

Thanks for reading

– Bill Pritchard

Hello to everyone

This week began on a positive note, with the SP 500 and other indexes closing up on Monday July 1.   The trading volume was not as high as I would have preferred, and as such, these “up moves” have questionable credibility.   Volume is the horsepower behind the move, and it is not where it needs to be yet.  The perfect day is an “up day” (end of day closing price is higher than the start of day price) on above average volume, ideally 25% (or more) above its average trading volume.  These two things, when occurring during one trading day, is a positive thing.  Not one, not the other, but we need both.

Note that this week will likely see light volume the entire week, due to the July 4th holiday and reduced trading activity this week.

My personal observation is that we are looking for the SP 500 index to CLOSE at or above 1630 on multiple back to back days in order to believe that any new upward movement in the indexes are for real.  Let’s see how the next week or two play out.   It should be noted, that the months of July-August-Sept are historically (absent a few occasional deviations from this trend over the years) the worst performing months of the year.   What does this mean?  It means that if July 2013 is “down”, this does not mean that the world is ending.   Historically, July (and August and Sept) tends to be down.   Of course, we let the market tell us what to do, and if Mr. Market decides to give us great returns in July, I am not going argue and will take what he gives me.

On July 2, the indexes performed well during most of the day, then turned downward in the afternoon, with the SP 500 closing below the 50-day Exponential Moving Average (EMA), which is a key trend line, to help determine trend and health of the market.   The 50-Day EMA is 1611.   This EMA will change as the days ahead progress, but for now the thing to be aware of is that a “close” (last price the market traded at when it closed/stopped trading for that day) near or below 1611, is not desirable.

Let’s take a look at two charts of the SP 500 Index, one with a 3 month view, and the second chart being a 1-month view, with my comments.

I am personally still “long” (holding stocks that I bought) in my personal brokerage account, and since they are still doing relatively well, I have held on to them.  However, my TSP Allocation is 100% G-Fund.  I will monitor things and advise everyone as warranted.   I recommend everyone watch the SP 500 index and keep their eyes out for activity at or above 1630.    The remainder of the week will likely be low trading volume and thus, whatever happens, is probably not worth considering for our decision making.  If you turn CNBC off the rest of the week, you probably won’t miss much.

Thanks for the interest in the site, and if you find the site informative or useful, please pass it to your friends and coworkers.   I have received quite a few nice emails this month, thanks for those.

Take care everybody

– Bill Pritchard

Hello

Today, Monday June 24, witnessed another volatile day as the world worried if the patient would breathe on his own, after it was discussed last week by Ben Bernanke that the breathing machine would be disconnected in the future (see my earlier analogy reference this example).   The markets closed down on above average volume.

It is my opinion that a move to the G-Fund is in order, to reflect 100% future contributions and 100% of your account balance, to be shifted to G-Fund.

Me, personally, I am still a cheerleader of our economy (the recovering “patient”) and believe things are slowing turning around, and have my own facts to prove it.  However that does not mean I am going to try to catch a falling knife, and it is my opinion that a precautionary move should be made to G-Fund.

I might add that I have struggled with crafting this post, as my feelings about the overall economy and long-term stock market are very positive, however trading and investing on emotion is an amateur mistake, and I had to remind myself to step back, look at the market itself, and pull the trigger accordingly.   Unfortunately, we have had some down days and we need to protect our account balances.

On that note, I invite everyone to take a look at this 06-24-13 video, courtesy of CNBC, in which Rick Santelli is interviewed.  The short version is Santelli’s position is that the market is going to do what the market is going to do.

I am moving my balance and future contributions to 100% G-Fund.  Thanks for reading everyone…hopefully these storms clouds clear up in a few weeks.

– Bill Pritchard

In the “other news” category, I wanted to post an update to a very important project that has been in development.

On June 18, 2013, the San Angelo, Texas City Council approved the renaming of Rio Vista Park, to Jaime Padron Memorial Park, to honor USMC veteran and Police Officer Jaime Padron, who was killed on duty, in 2012.

Video Link is at http://www.youtube.com/watch?feature=player_embedded&v=zQSUYXfLJq8

Please scroll to 0:29:23 in the video and hit play, to view the City Council discussion of this project.

Below, is a Google Earth image of the park, which is under renovation and when work is completed, will be re-opened under Jaime’s name.  I will be there in July and will take some pictures of the ongoing renovation efforts.

This project was the result of many folks coming together and working towards a common goal, and as the initiator of this important project, I can’t say enough thanks to the great people in the San Angelo City Council, specifically Mr. Johnny Silvas, of Single Member District 3, Matt Baldwin, Brian Bylsma, and Johnny Padron.  Thanks to Austin Police Chief Art Acevedo for his tremendous support.  These great folks were the reason that this was successful.

Thank YOU

– Bill Pritchard

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Hello everyone

Today, Ben Bernanke stated that the Fed would likely start reducing its stimulus program.  Markets closed down on above average volume, but above key trend lines.

I want to allow this week to “close out”, after which I will take a look at things and share my insights early next week.   I might add that markets typically panic for a day or two, then re-stabilize, when bad news is released.

NOTE:  My position is that the US Economy is a hospital patient, hooked up to life support (Federal stimulus/QE programs).  Well, the patient is starting to get healthier, and it may be time to remove life support and allow the patient to breathe on his own.  This is good for the patient, not bad (allowing him to breathe on his own).   The patient will cough and moan and probably ask for that machine again, but big picture, if the patient starts breathing on his own again, and continues to do so, the patient will be stronger and better-off.

During the window of time, between when the doctor’s fingers hit the “OFF” switch on the machine, and when the patient starts to breathe unassisted, during this transitional period, the onlookers in the room will be worried, nervous, and probably praying.   Right now, today, we are in that period.

I had dinner with a fellow subscriber last night who was TDY to my city, and this topic came up.    My explanation sounds a little corny, I wish I could produce a Princeton PhD dissertation regarding financial friction and macroeconomics (someone else wrote it) , but my explanation gets the point across.

Lets see how the week finishes up, and expect another update soon.   If you find this site useful or informative, and it has materially impacted your Thrift Savings Plan (TSP) performance, I ask that you share it with your friends and coworkers.  I can’t place advertisements in the Wall Street Journal, and rely on word-of-mouth for building my subscriber base.   Thanks for reading

– Bill Pritchard

TSP Allocation:  100% S-Fund but monitoring things closely over next few days.

Hello and Good Evening to everyone

The month of May is behind us, and while a few of you have emailed me regarding the “Sell in May” strategy, I advocated that we let the market tell us what to do, and respond to the market itself.  It is very hard to “outguess” the market.  My investing methodology can be categorized into the Trend Following category, and this past month was a good example of why this strategy tends to be successful.

It should be noted that the SP-500 Index closed at 1582.70 on May 1, and on May 31, closed at 1630.74.  This represents a 3.0 percent gain in May on the index.  In today’s turbulent market climate, I am happy to take any gain the market gives us.    Please see below table representing the official TSP site monthly returns.

As can be seen, the top fund for May 2013 was the S-Fund.  It should be noted that the I-Fund was down -3% for May.  This is while the US Indexes were generally all positive.  Some may recall my observations regarding the I-Fund, observing that its April performance may or may not have been sustainable.  The I-Fund is a weird animal, much more susceptible to international politics and global economic turbulence.   This can at times put tremendous gains on the table, and sometimes take them away.  The I-Fund sometimes runs in sync with US markets, and sometimes it does not (as shown by May’s behavior).   This is not a “knock” against the I-Fund…however at times the I-Fund requires that your seat belt be tightened a little more than if you are in the S/C Funds.

June opened up on a positive note, with the indexes performing very well on June 3, 2014, closing higher than the prior day, on slightly higher than average volume.  I would have liked the volume to be a little higher, but I will take what I can get.  On June 4, 2013 however, some nervousness about the Federal Reserve’s low-interest rate and bond buying programs (aka QE or Quantitative Easing) have caused the markets to go lower.  One June 4, the SP-500 closed lower than June 3, on average volume.   No “high volume sell off” occurred on June 4, nor did it trade lower than its low of June 3, which was 1622.72.   However, we still need to monitor things and keep the trigger finger ready for G-Fund if the situation dictates.  See chart below.

As a counter to this, Big-picture wise, we are seeing positive news reports regarding the economy, involving reports of rising home prices (indicating buying, versus selling of homes), reports of rising car sales, and other things.  In summary, I am not (not yet) going into panic mode over the Federal Reserve market nervousness….I see other positive signs regarding the economy.

At 10:15 PM Central Time June 4, the SP-500 evening futures contract found support and did not trade below the daytime session.  This usually (but not always) foreshadows what will happen on the next day’s stock market trading activity.  See chart:

Once again (not bragging, but….), this site provided accurate insight into the best performing fund.  Since January, I have expressed my opinion that the S-Fund is the place to be, barring the move to G-Fund in April, due to North Korea’s threat of nuclear war.  However, most can agree that since January, this site has provided accurate and informative guidance into the funds, ten of which exist, and almost every month since January, I have successfully called the top fund, out of ten potential choices.  An internet search will reveal many “TSP advice” websites, mostly all subscription/payment based.  This site has likely outperformed them all (to my knowledge) and is free.  If you find this site useful, please pass it to your friends and co-workers.  Thank you for the interest and the numerous positive emails.

Thanks again for reading….

– Bill Pritchard

TSP Allocation:  100% S-Fund

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Hello everyone

As most of you know, May has been a great month so far for the markets.   All of the indexes are performing very well, and my preliminary proprietary data is reflecting that S-Fund will be the leader for this month.   Today is May 22, so that leaves us with six (6) more trading days in the month.  It should be noted that the markets are closed on Memorial Day, May 27.

Today witnessed some nervousness in response to the release of the recent Federal Reserve Board meeting minutes and testimony by Ben Bernanke to members of Congress.   In summary, Ben Bernanke told Congress that the bond buying program in place, may slow, and that monetary policy may become tightened in the future.

As a result, the SP 500 Index closed lower, on very high volume.  However I don’t believe this is reason to panic, as the evening SP 500 futures trading indicated that “traction” was found and the futures were trading higher than the day session lows.   See charts below:

Again, I am not overly concerned about the nervousness surrounding the monetary policy, but in the end, we must let the market tell us what to do.  For now, things are still good but today’s downward price action on high volume is an attention-getter.   It will require that we closely monitor things in the weeks to come.   Note that Friday May 24, will likely be a low volume day, due to traders on Wall Street not being at work, having left early for the long weekend.  So whatever happens Friday, should probably be disregarded.

My opinion is that the economy is on the rebound and things are looking positive.  My personal TSP Allocation is 100% S-Fund.   At this point, 100% S-Fund or 50% S-Fund and 50% C-Fund would both be fine.

I wanted to say “thanks” for all the emails and compliments sent.  As always, if you find this site useful, and/or your TSP balance has benefited from the information posted here, please pass the site to your friends and coworkers.

Thanks for reading….

– Bill Pritchard