Sunday Update: 50% C Fund / 50% G Fund Until Further Notice.
Short Term
It was a pretty quiet week for the stock funds as volume continued to run below average. The S&P500 (C Fund) closed the week where it started at 2100. In the chart below, the Slow Stochastic looks to be rolling over but is not yet below 75. The MACD and Divergence both have some room before topping out. We could see the S&P500 move up and challenge the all time high at 2135. OR We could also see it roll over from here and test the 200DMA at just above the 2000 level. The bottom line is that we do not have an identifiable trend. 50%C / 50%G is where I’m staying for the time being.
Long Term
In terms of a trend, the long term view is no better that the short term. The C fund long term chart shows some potential with the Stochastic headed up but, we have seen this 2100 to 2135 area before. As the chart below shows, the market has not been able to break above this area, having tried numerous times, over the past 2 years.
The I Fund chart is the worst of the 3. At the moment, the I fund cannot seem to get above its 50WMA and each successive high has been lower than the previous high. Although at the top of its channel, the I fund is in a pretty clearly defined down trend right now.
The bright spot in the stock funds is the S fund. The S Fund broke up thru its 50WMA the week before last and finished higher this week. Importantly, the S Fund closed the week above the prior recent high of 85. This is a positive sign for a continued move higher. Supporting this breakout, the slow stochastic is rising and the MACD has lots of room to move up before maxing out. It is possible that we will see the S fund challenge the high of last summer at around 95.
The market can move quickly on these low volume summer days. Stay tuned!
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