* Alert * : 01 April 2020
New Allocation: 100% G Fund
I hate to use one of our reallocations on the 1st day of the calendar month. Having said that, the market drives trading decisions, NOT the TSP restrictions… The C fund gapped down this morning, down almost 4.5% for the day, and closing right on its 10DMA. That alone is enough, in this market, to reallocate to the safety of the G fund. What really closed the deal for me was 3 things:
- The Break in the Pattern. As you can see in the C fund charts below, following last weeks huge rally, we had several days of consolidation forming a Bullish Triangle just below the 38% retracement level. This consolidation SHOULD have resolved to the upside but, it did not.
- Resistance at the first Fibonacci resistance level. The C fund rallied and recovered just under 38% of its losses from the high. The 38% Fibonacci retracement level is a very common reversal area. This morning’s huge gap down was a clear reversal.
- Resistance at the Trend Line. We now have 2 lower highs to connect for a downward trend line (the second chart below). This morning’s gap down was a clear reversal at the now established short term trend line.
What’s next?? Again, I have no crystal ball but, today’s gap down was likely the beginning of a new leg down to test the prior lows or to new lows. We will watch and see what happens over the coming days and weeks. The ONLY positive today was the relatively light volume. On such a big gap down, we would have expected volume to be significantly higher than yesterday. We’ll see what happens tomorrow…
We have one opportunity remaining in April to reallocate to the stock funds. IF we get an opportunity, we’ll take it. If not, we ride out the decline in the safety of the G fund. Stay tuned! The bottom will come when the majority get apathetic and throw in the towel…
Stay HOME, if you can. Let’s get past this and Grow our TSP!
You were having some issues with your site this morning after the text went out. Glad it got fixed right away
Yup. Too many people hitting the server 🙂
“If” I were to have gotten everything back to the G fund on Monday because of negative sentiment and to save 2 moves for April, is there a number you’d look at for getting back partially involved in the stocks? Hypothetically speaking, or course.
Justin. “Hypothetically”… I’d get 25% back into the C fund at 2200, the prior low of the S&P, and let it sit…
Could you please refresh TSP interfund rules? If hypothetically we go back into the funds this month (2nd move) can we move to G if things turned down again? Thank you
Ronald, you can ALWAYS go back to the G fund..
what happen to the upgrade allowing us to receive a text message when there was an update?
Eric. The text functionality is up and working. I’ll take a look at your account and email you back.
Hi! I am brand new to this group( this morning new). I wish I had joined yesterday morning. After sitting in G for April, I moved to L Fund 2020 and 2030 (50/50) yesterday trying to get back in without moving all from G. So I only have one move other than to G. I am retired ( do not have to take funds from TPS for a couple of years) so do you think I should move 100% to G now and just ride out April there or stay where I am and pray? I am very impressed with the analysis and charts I am seeing here… just wish I had found you sooner.
Hi Nora. I’m glad you found us! The L2020 isn’t too bad right now since there isn’t much stock exposure in that fund. The L2030 has much more stock exposure than I would want in this market. From a chart perspective, I would absolutely move to G on a close below last week’s low (about 2200). So your risk is the difference between where we are now and last week’s low. You can go to the TSP site, look at the % each L fund is invested in each stock fund, and figure out your actual % and $ of risk. Once you know that number, you just have to decide if you can live with that level of risk. It’s a tough call in this volatile market for sure!
Thank you, Jerry. I already broke the L 2020 and 2030 into the stock fund %. Now I have to make a decision…G looking better and better but have to admit it was hard being all G last month when things went up but I am convinced we are headed lower unless we have a miracle…not seeing one right now. Thanks so much for your quick response and for the great information on this site.
I know you will likely send more info later today about why you are recommending for today Tuesday, but can you offer anything now. Respectfully, last weeks move hasn’t played out too well so I am wondering what you are seeing.
I will explain this with the hep of the charts later today. Bottom line is this. Following the gap down last week, the C fund did find support at its 10DMA and exploded higher yesterday on big volume. Everything in me “believes” the market is ultimately going lower from here but, the charts don’t care what I “believe”. More to follow in the Alert later today.
Thank you for responding. I will await your post but am just wondering how confident if only going in 30% for our last move of the month. Just frustrated and losing faith a bit.
Seems like a rigged game. Not by you 🙂
These are difficult times, in many ways. We will be doing a Facebook Live broadcast to discuss this latest Alert, and give you more insight into the decisions. Make sure you are following our FB Page and FB Group. We are planning the broadcast for sometime tomorrow evening. Also, we will be doing a “Weekly Update Show” on Facebook Live every Sunday. Be looking out for that too! Thanks for being a member, and hang in there!
Not on FB.
I don’t understand your comment. You got the Alert via email and text correct?