New Allocation: 50% S Fund, 50% I Fund

DISCLAIMER!  This is a risky reallocation.  Market risk is HIGH.    This post is not intended as personal advice for anyone who is subscribed to this service.  We all have different circumstances and risk tolerances.  You need to make your own decisions with regard to reallocations.  I’m passing along what I am doing in my personal TSP account.  

With that out of the way…

Ok folks, I’m doubling down on the current oversold condition of the S and I funds.  I generally like to see a bottom established, and a confirmed up turn, before reallocating into the stock funds.  In this case, the set up on the S and I funds make a reallocation worth the risk to me.  

The S fund is way over sold and reversed today at the 2 year trend line.  I’m looking for a move higher from this point.  Because the chart below is weekly, we could still see prices fall a bit through this week but, the week should close at or above the trend line.  Wm%R and RSI are at levels where reversals have happened each time over the past 3 years.  Odds favor a reversal at or near this level.  *A close below 1400 is a game changer*

The I fund is back down to the channel lows on the daily chart below. It’s about a 4% move back up to the prior high at 69. Wm%R and RSI are at levels where reversals have taken place each time over the past 10 months.  *A close below 65 is a game changer *

We are due for a short term reversal in both the S and I funds.  I expect to stay at 50%S fund and 50%I fund until Wm%R gets back into the green and then turns down.  This may involve 2 reallocations since the I fund is more volatile than the S fund.  If you’re following this with me, please stay alert!  The volatility is not likely to let up any time soon…

Jerry