New Allocation: 50%C Fund, 50% G Fund
Folks, this is a very tough market. I moved to 100% F fund on the gap up off the most recent low. As you can see in the chart below, the last 2 times the F fund gapped up off a low it went on to significant new highs. This time the market went against me. Today’s close, below 109.10 and the prior low, is a clear indication to get out of the F fund. See the chart below.
I have no problem selling the F fund with a 1% loss as the risk was fixed and known. What to do next is a little more tricky. The stock funds are pausing but they have not rolled over in a meaning full way YET. The risk here is VERY HIGH. If you are risk averse, I would go to 100% G fund to ensure no additional losses. If you watch the market closely then stepping back into the C fund MIGHT be a good idea.
It looks like we may be in the beginning stages of a “Melt UP”. This is a last ditch effort to pull everyone into the final thrust higher. Given the very positive earnings reports that came out tonight for Google, Microsoft, Amazon and Twitter, this could drive the melt up significantly higher. The C fund chart below shows the likely short term Elliott Wave count. I will be watching this very closely and am only willing to put 50% of my funds at risk. Because I have 1 reallocation left for the month of October, I will be moving to 50%C and 50%G tomorrow. If it all rolls over, I can always move back to the G fund.
Again, the risk is HIGH. A close on the C fund below 2540 would be a problem. If the market drops drastically tomorrow morning, I will be moving to 100% G fund though I don’t expect that will happen… Get your move in by noon EST tomorrow to get tomorrow’s closing price.
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