Sunday Update and ALERT: 100% G Fund

September is historically a crazy month for the market.  If Friday is any indication, this September could be one for the record books…

The market had been consolidating for the past 2 months.  During that time, I was fully invested in the stock funds as the long term pattern had an upward bias.  On 28 August I posted a move to 50% stock funds and 50% G fund in anticipation of a big move, in one direction or the other, following the consolidation.  We got that move on Friday.

I expected the market to move up from this consolidation and to top out around 2300-2350 on the S&P500.  This still may happen but not before a near term correction.  Friday’s move down, corroborated by both the short term and long term technical indicators, could be the beginning of a significant correction.

Rule #1 is Don’t Lose Money.  I am moving to 100% G fund until a bottom can be identified.

Short Term

The 6 month chart of the C fund below shows a serious break thru the 50DMA and took out more than the past 2 months of consolidation.  The price move is confirmed by the negative move on both technical indicator charts.  The red line of the Slow Stochastic should get below 25 before the end of the price decline.

20160909cfund6monthdaily

Long Term

The long term chart of the C fund is similar to the short term.  A big weekly price drop that is confirmed by a roll over of the Slow Stochastic, MACD and Divergence.  Again, we are looking for the red line on the Slow Stochastic to get below 25 before the bottom is in place.

20160909cfund2yrweekly

The long term S fund chart below is interesting.  The price range last week engulfed the range of the past 4 weeks and broke down below strong support at 90.  Additionally, the S fund never got back to the prior high of 90.  This is not a good sign.

20160909sfund2yrweekly

The long term chart of the I fund is the best looking chart of the group.  If the I fund holds above the 50WMA next week then we may look to re-enter that fund.  Historically, all 3 stock funds move together.  The I fund has been so beaten down over the past several years, it’s possible that it is not dragged down by the C and S funds.  We’ll be watching the I fund chart closely.

20160909ifund2yrweekly