* Alert * : 11 March 2021
Market leadership has been rotating for the past several months. This became clearly evident in mid-February when the Nasdaq Composite Index (Tech) rolled over from an all-time high. As the Nasdaq declined and made a clear break in its long term up-trend, the Dow Jones Industrial Average (Industrials, energy, financials) continued to make higher highs. See the chart below that posted this morning to the Face Book Group.
After the open this morning, the Nasdaq exploded higher and closed the day above both its 50DMA and 10DMA. At this point, it looks like the divergence has resolved itself to the upside. The market SHOULD continue higher, in unison, going forward. We would have liked bigger volume on this follow thru day on the Nasdaq. Ideally, we will see volume increase as price moves higher going forward. Below is the updated chart showing the completed divergence.
The C fund hit an intra-day all-time high today and the technical indicators have turned positive. The only negative in this chart is decreasing volume as prices increase. If you look at the first 2 weeks of February, you can see prices increase on decreasing volume. This eventually led to the most recent correction. Definitely something to watch for the next few weeks…
At the end of the day, our goal is to be in the stock funds when the market trend is up. Today’s price jump on the Nasdaq ended the divergence and prices should continue higher going forward. Volume is definitely a concern. We want to see volume increase on up days. This will show confidence in this latest rally attempt. Investors Business Daily newspaper seems to agree with this analysis. Earlier today, IBD changed their Market Trend Indicator from “Market in Correction” to “Confirmed Up-Trend”.
We will talk about all of this in the Member Webinar this weekend. If you haven’t signed up, please check your email and get registered.
Jerry
Thank you Jerry.
Thanks for the alert and the information that was driving the change. I was wanting to make changes on Tuesday, yet I only had one move for the month left. So with your alert it was enough to submit the IFT. Thank for what you do!
Thanks Ron!
Based upon the last 2 recommendations I am now locked into the G fund until the end of the month. The one on Friday 2/26 did not take effect until Monday 3/1 and the other one on 03/05 locked it in. Priceless
If you know a Congressman that can help us change these archaic rules, that would be awesome!
Thanks for your guidance. I am admittedly ignorant of the inner workings of the stock market. As for my tsp, I put money in, picked what I thought would do well based on nothing other than what I thought or heard was good. I recently found this group and have found your analysis enlightening. Thank you.
Welcome aboard Laura! TSP management can be overwhelming but, it’s like riding a bike. If you practice consistently for a few weeks you’ll get the hang of it! Let us know if you have questions.