The S Fund has been on a bearish tear the last 4 market days.
Current economic conditions have caused markets to decline. When the market is introduced unknown variables, it tends to react negatively. Uncertainty in Europe and the Bernanke's reluctance to hint or support any form of QE3 has made the market skittish.
This first chart is of IWM (S Fund equivalent) with a weekly interval:
Here are the highlights:
* the 3 regression line (RL) is bearish;
* the 13 RL is bearish;
* the 39 RL is bearish;
* The dotted purple line is acting as support today. We have dipped below it which means we could be moving towards the 74.59 support line. However, a small pop should occur due to the FB hype and Memorial Day. However, if the bear trend is strong enough both FB and Memorial Day will not have a great positive influence on the market;
* On Balance Volume (OBV) is showing support for the downtrend. OBV has breached the weekly uptrend line which was horizontal which showed support for the previous ranging market;
* Support and resistance lines for OBV have been drawn. Watch to see where the market goes. These lines should help as a market road map.
* The last weekly candlestick was a spinning top showing indecision in the market.
* This week's candlestick seems to be forming a simple black candlestick which represents normal selling pressure.
This next chart is of IWM on a daily basis:
Here are the highlights:
* the 3 regression line (RL) is bearish;
* the 13 RL is bearish;
* the 39 RL has formed a top and flatlining and strong reversal sign;
* The blue price trend lines drawn show a gradual bearish trend forming which shows signs of accelerating. What worries me is that the downtrend seems sustainable with its current angle of decline. There will be minor uptrend corrections, but I can see general bearishness if no market manipulation occurs. Even if market manipulation occurs it will have to be signifigant to fight the bearish of the market.
* The blue OBV trend lines showed volume supporting price decline. Generally, volume precedes price in terms of movement. A good buy in opportunity is when OBV has a bullish divergence from market price and OBV has breached its uptrend line.
* The past few days have had black candlesticks forming. This signifies normal selling pressure which supports the bear trend that seems to be forming.
When to Go Back In the Market
Look for the following:
* On the daily interval chart, look for volume and price divergence. So price is declining or flat lining and OBV is advancing upwards;
* The OBV line moves above its uptrend line;
* A candlestick bullish reversal that coincides with OBV;
* Slope of 3 and 13 RL lines flattens. Look for a possible crossover as well;
* See how price is acting when near critical resistance and support lines;
* I've stopped using oscillators as I believe we have moved out of a ranging market and into a downtrending market. I will use the 25 day Aroon indicator to support the downtrend theory.
I have used 1 IFT so far this month and wish I had another.
I think there are 2 possible points remaining where it might be worth it to go into the C/S/I Fund. One is today, with the FB IPO, and the other is to try to gain a little over the Memorial Day Holiday.
Unfortunately, macro conditions make it impossible to accept the risk of staying in over both events IMO (just me, OK, others appear to be fine with it).
So I've decided that since FB is not yet in any index and will have only a small effect, I'll wait and play the Memorial Day Holiday if the market stays down between now and then. I think there should be high confidence that the C & S Funds will be up tomorrow. But the weekend can bring some nasty Euro (or JPM) surprises.
But probably the market will rebound before Memorial Day and I'll just miss out on any decent opportunity to be in the market when I would judge the odds to be favorable to be in.
Hopefully, the FRTIB will read this and see how the TSP is thoroughly NOT serving our needs in the environment that has persisted for the last 4 years and will remain for the foreseeable future.
After doing pretty bad last fall winter I decided to go with professional advice. The first stayed in G the entire time in Jan, then I switched. But with a current recommended allocation of 50%F, 25%S and 25%C, I have steadily lost every day this month, and much of April! Now down about 4k and wondering if anyone has any words of wisdom? Is there any sense in keeping with this proposed strategy? Should I hold on and why/why not?
TSP Center is dedicated to providing information on the Thrift Savings Plan. It is designed to be a location where Thrift Savings Plan participants can meet to discuss the TSP and strategies for maximizing TSP returns. All information on this site is provided for informational purposes only and without guarantee. In other words, TSP Center assumes no liability for its use. TSP Center is not affiliated with TSP Evolution, the United States Government, the Thrift Savings Plan or www.tsp.gov. FantasyTSP™ is a registered trademark of Hostspring Technologies, LLC.
