New Allocation: 34% C Fund, 33% S Fund, 33% I Fund
Last Thursday 14 November, I reallocated to 100% G fund. Anyone who made that reallocation did not enjoy the gains made by the market on Friday. Call that the price of buying down risk. Our goal is NOT to “time the market”. Our goal is to manage risk. Like the 14 November ALERT, there are 3 reasons that I am reallocating back to the stock funds.
There are 8 and 1/2 trading days left in the month of November (the market is closed on Thanksgiving and open 1/2 the day on Black Friday). Moving back into the stock funds now enables us to capture gains going forward while maintaining the ability to move back to the G fund if necessary before the end of the month. This was a good example of maximizing the number of allowed reallocations per month.
The I fund did not continue to roll over. It filled the gap from late October and then broke higher on Friday, finishing at the top of the daily price range on higher volume than the prior day. This is a bullish sign. It is also supported by the breakout of the S fund from its flat base pattern since 1 November.
Finally, and most importantly, we got a strong weekly close to new all-time highs ABOVE the upper channel line. This line that was resistance is now a floor. A weekly close below 3050 could be a serious concern that we will discuss if necessary. Otherwise, the market is clear of resistance and likely to move higher.