New Allocation: 70% G Fund, 30% C Fund

I absolutely DID NOT expect to be writing this Alert.  Everything in me “believes” the market is ultimately going lower from here.  It may eventually roll over, test the lows, or make new lows but, what I “believe” does NOT matter.  I have to execute based on what the market is doing NOW.  The point of Technical Analysis is to take the emotion out of reallocation decisions.   Having said that, I am not ready to jump back into the stock funds 100%.  I want to see another successful test of the 10DMA before putting additional funds at risk. 

After running up from the 2200 low, the C fund hit 4 days of resistance at approximately 2625 then gapped back down to the 10DMA.  Following 3 days of consolidation, the C fund exploded higher yesterday (On Big Volume) and closed well above the 2625 resistance level.  Today, the C fund is adding to those gains.  

There are lots of technical and economic indicators to watch but, at the end of the day, the 10DMA is the key.  When the price is above the 10DMA, the trend is rising.  When the price is below the 10DMA, the trend is falling.

I just used my second reallocation for the month of April.  I can still move back to the G fund if the market rolls over but, I cannot increase my stock fund position until 01 May.  Making reallocation decisions in an extremely volatile Bear Market, within the structure of the TSP is very difficult.  It is what it is…  If the market moves higher from here, I will get 30% of those gains.  If the market rolls over, I am only 30% at risk AND can go to 100% G fund if necessary.  For now, this is the best I can do keeping the 2 Cardinal Rules in mind:

  1. Don’t Lose Money
  2. Be in the Stock Funds When the Market is Going UP

Now is NOT the time to get complacent!  IF the bottom is in at 2200, great!  IF this is a Bear Trap, we have to be ready…

Jerry