Thrift Savings Plan Talk

We need this pullback.

Going too far, too fast makes the market very dangerous. This pullback is just what the doctor ordered to keep the market healthy and ready for the next leg up. The short-term indicators were getting quite overbought and this is a little refueling process. The question is, how severe will it be?

My guess it won't be too bad and isn't even worth trying to play as it could be short lived. I am confident (uh, oh) that we will see a higher indices in a few weeks and my short term transactions tend to backfire on me.

The market was due for a pullback and oil jumping back near $51 a barrel yesterday gave it an excuse. The dollar also seems to be digesting the recent gains as it has gone basically sideways for the past 7 or 8 days.

The S fund took the brunt of yesterday's losses. I get a lot of questions about why I am not heavier in the S fund. My reason has been that it is more volatile and vulnerable during the economic cycle that sees interest rates rising. It will do well during rallies and get hit harder during pullbacks. Perhaps I will raise the percentage after this pullback.

Back to the seasonality data. Historical trends tell us that today could be less than spectacular, Friday (pre-holiday) should do well, and Tuesday (post holiday) might be below average. That is based on the holiday trend. As I mentioned the other day, in general the last two trading days in May, and the first five days in June are typically stronger than average. A bit of a mixed bag.

I don't have any fancy charts or indicators to show today. Things are playing out well and nothing unusual is happening.

That's all for today. Currently 65% C, 35% S fund. Until next time...