Sunday Update: 25% C Fund, 25% S Fund, 50% G Fund.

This post is going to look a little different.  I’m using different charting software that allows me to see the patterns better.  Also, the focus will be on the very long term charts of the stock funds.  The charts will take us all the way back to the last major low in 2009.  But first, the short term update..

Short Term

It’s been almost 2 weeks since the election and the C fund is back up to the highest levels of the year!  The market has gone straight up since the election and is definitely overbought in the short term.  We are just about at the previous high on the C fund at 2193 so, this would be a great week for a pull back.  Ideally we will see the C fund pull back to the 2150 area.  That is where I would like to get back 100% into the stock funds.  While not a guarantee (we still need to get above the 2200 level), there is potential for a big move up into 2017.

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Long Term

The long term charts below paint a great picture for the C and S funds going forward into mid to late 2017.  The channels are clearly defined and the post election break outs tend to confirm this outlook.  This is where I think we’re headed.  It may be a bumpy ride to get there but, I expect we will see prices at the upper channel lines before the next major decline in stock prices.  Any weekly close below the lower channel line and all bets are off.  If the channel does hold and the count is correct, we will see big gains into 2017 followed by a crash on the scale of 2008 at a minimum..

* This is the very long term outlook.  I will still continue to utilize the 6 month daily and 2 year weekly charts to make reallocation decisions. *

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The I fund is a different story.  Historically, all of the stock funds tend to rise and fall together.  The I fund is clearly out of sync with the C and S funds at this point.  The area around 52 is a critical level of long term support for the i fund.  A weekly close below 50 would indicate a long term breakdown. That being said, there will be a significant amount of support at 52.  This would be a good area to buy into the I fund at low risk with great potential return.

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It’s very important to keep the broader perspective in mind and not get pulled into the daily grind of the market.  I hope this post provided a bigger view of the possibilities going into 2017.

Please post questions to comments and SHARE with your friends and co-workers.

Jerry