Sunday Update: 23 October 2016

Sunday Update: 100% G Fund

Virtually no change since last week.  The short term trend has firmed up a bit but, nothing to write home about.  One of two things is happening here.  Either the market is consolidating and will eventually explode higher OR we are setting up to fall off the cliff…  Historically, the markets rally from November thru January of a new Presidential election cycle (although that did not happen during President Obama’s first term).  Either way, the G fund provides guaranteed gains, however small, until the market decides which way it will go.

Short Term

The market did firm up a bit this week, especially with the reversal on Friday, keeping the S&P500 (C fund) above prior support around the 2120 level.  With the technical indicators turning positive on the daily chart, we could see prices move up next week to test the 50DMA at around 2160.

Long Term

There was no change in the long term trend of any of the 3 stock funds.  The technical indicators on the stock funds really need to get down into the Over Sold area before a significant push higher is possible.  The February 2016 low on the C fund chart below is a great example.  Both the blue and red lines of the Slow Stochastic were below 25 (the over sold level) before the price chart bottomed at the 200 Week Moving Average (WMA).

The 2yr weekly chart of the C fund shows very little movement in price compared to prior weeks, with technical indicators continuing to trend down.

The S fund chart looks similar to the C fund for the week.  Very little price movement and the technical indicators still trending down.

The I fund is still above its 50 Week Moving Average (WMA) but is struggling to hold on.  It’s technical indicators are also beginning to trend down.

With one week remaining in October and about 2 weeks until the election, things could get interesting.  Being in the G fund and watching from the sidelines is the way to go right now.

Have a great week.

Jerry