Thrift Savings Plan Talk

The deadline strikes again

A day late and 1.25% short. Once again we witnessed the trouble with trying to trade our TSP accounts for the short term. It's that %#@* deadline. Yesterday my thinking was if the recent uptrend broke we could be seeing a test of the recent lows. At the time I decided to go 100% G fund the Dow was down about 25 or 30 points. As you probably saw, the market slowly sunk all day and we ended up with a triple digit loss. It would have been nice to be able to jump out as soon as I decided and watched the afternoon sell off from the sidelines. Now with the one day delay I risk being whipsawed... jumping out just as thing turn up.

The market could certainly continue down, and it just may, but after three down days in a row, and yesterday being a big down day, I'm usually looking to get in. There are still reasons to still be on the sidelines and we are still in that 4 to 8 week period that I have been talking about for that "real" buying opportunity. I'm not so sure we've seen it yet.

On the bullish side the AAII Investor Sentiment Survey saw bears moved back up over 40% to 46%. On the bearish side the 10-day moving average of the ARMs Index, the overbought/oversold indicator, and the McClellan Oscillator have all turned down but are not at extreme oversold levels yet. Meaning, we could see more downside.

It is a tough call with today's GDP report, the FOMC interest rate meeting next week, and the C.I.A. leak case indictments. It could be a "sell the rumor, buy the news" situation but that "bad" news may not be bought until Tuesday or Wednesday, after the rate hike announcement.

So far the selling hasn't been panicky. When you start to see or feel the panic, it is probably time to buy again. If you are not inclined to jump in and out of stocks I would be looking at these drops as opportunities to be getting in stocks rather than out. Buy the dips and anticipate a final bottom sometime between now and the end of the year.

The short term is still very uncertain. It can be fun to predict and trade particularly when things are this volatile. Just don't forget to look at the big picture knowing the big gains will come by being in stocks for the long term. I'm still waiting on the psychology and monetary legs of the market to tell me when it will be a good time to do just that. Until then, I'll play around despite that darn deadline.

Some people tend to get upset when I jump in and out because they may be a step behind me. I will stress that if you can't be nimble in a market like this, think longer term and don't try to trade. Check out the allocation suggestions for the longer term.

That's all for today. Currently 100% G fund. Thanks for reading.

Administrative Note: I saw Beatlemania play with the Utah Symphony Orchestra Thursday night (Great show!) and I got off to a late start tonight, so unfortunately I won't have time to put up a new Market Item. Thanks to the buyers of the first three items! I appreciate your support!