New Allocation: 100% G Fund

I sent a precursor Alert this morning at 11:45 EST.  I know it was late in the day and only gave 15min to make the move on the tsp site.  Please understand that I make reallocation decisions based on multiple time frames of the TSP stock funds combined with technical analysis tools.  I post the decision as soon as I make it and before I reallocate in my personal TSP account.  The last straw today was the morning reversal in the S and I funds.  Ultimately the C fund reversed as well on the day.  

In the bigger picture my objective is to #1 Don’t Lose Money, and #2 be invested in the TSP stock funds when the trend is UP to allow for maximum growth with minimal downside risk.  While the medium to long term trend is still UP, the short term trend is bumping up agains some significant resistance on the C and S funds that I will describe in the charts below.  I do not expect to be in the G fund for long.  This is all about managing risk.

The 8 month chart of the C fund below shows a well defined 4+ month channel.  Currently the price is bumping up against the upper channel line.  In addition, the prior all-time high (dotted line) is 2873.  This combination SHOULD provide significant resistance.  Add to that the decreasing volume as prices have moved higher over the past 4 days. It will be tough for prices to explode higher from here.  I want to see a daily close above 2876 before getting back into the C fund.  The upside risk here is 0.61%.  The downside risk, if we reverse down to the lower channel line, is 3.47%.  

Bottom line: a close above 2876 OR an intra-day reversal near 2775 gets me back into the C fund.

The 8 month chart of the S fund below is very strong but there is significant short term risk.  While an ascending triangle consolidation pattern is typically bullish, today’s reversal at resistance combined with divergent indicators, give me enough pause to move out of the fund until the pattern resolves.  A close above 1470 would clear this consolidation so, our upside risk is 0.62%.  The downside risk, if we reverse down to the lower support line, is 1.78%.  

Bottom line: a close above 1470 OR an intra-day reversal near 1435 gets me back into the S fund. 

This is the analysis that I did today before reallocating within my personal TSP account.  Take this analysis and utilize it to make your own TSP decisions based on your personal circumstances and risk tolerance.  In my case, I am willing to forego the minimal upside potential gain to avoid the potential downside risk.  Again, I do not expect to remain in the G fund for long, UNLESS the market drops below the lower channel lines of the C and S funds.  

Please post any questions to comments or email.  Have a great week!

Jerry