Sunday Update: 50%C / 50% G Until Further Notice

It was a pretty interesting week for the stock funds.  As one of my close friends said, it really tested my ability to read the tea leaves…  Last week’s post talked about a pretty good short term set up and we saw that play out this week.  On Tuesday the S&P500 (C Fund) jumped over 1% off of the 50DMA after a brief consolidation.  Everything looked great for another move higher EXCEPT the volume.

Volume is the amount of shares that change hands.  In the chart below, the black volume lines indicate the daily volume level when prices moved up on the day.  The red volume lines indicate the daily volume when prices moved down on the day.  What we want to see is low volume down days and high volume up days.

Volume was very low this Tuesday.  While all of the other technical indicators were positive, this low volume break out off of the 50DMA was NOT a good sign and Friday’s break down thru the 50DMA confirms this.  We are likely going lower from here…

20160513Cfund6MoDaily

Long Term

As we discussed last week, the long term charts continue to break down.  From a big picture perspective, it’s best to be out of the stock funds until a tradable bottom is established.  If you’re reading this post, but don’t manage your TSP closely, then I would consider moving to 100% G fund.

The charts below speak for themselves.  I am still 50/50 C and G because we have not seen any significant high volume selling.  If we do see that kind of selling, I will move to 100% G.  The fact that we have not gives me a modicum of hope…

20160513Cfund2yrWeekly

20160513Sfund2yrWeekly

20150513Ifund2YrWeekly

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Jerry