Committing to a plan

Both stocks and bonds took a hit yesterday as The Fed talked about a slight slowdown in growth, and moderate inflation concerns are still present.  Not a good combination - but still, things are not bad at all.  This was just a minor wake up call that the market doesn't always go up. 

I don't see any indicators giving us and strong signals either way, but once again the systems are active.

The EbbChart System is in the G fund today but will make an interfund transfer this morning to go into the I fund for Thursday - but back out on Friday.  Check out the ebbchart page for more info.

Trader Fred's TSP Trader System gave another submodel buy signal after the close on Tuesday.  That makes 3 total submodels currently in the market.

On the TSP Trader System page I posted some guidelines for what to do if you miss a buy signal.  Here is the original text:

All of the TSP Trader System back testing is based on entering and exiting the market when the system says so.  Jumping into the market in the middle of a buy signal is not necessarily recommended.  But now you can go ahead and buy when one of the submodels gives a buy signal within an existing system buy signal, but you'll want to exit when that same submodel exits the market, regardless if the system remains on a buy signal. 

A little explanation:  If any one of the 17 submodels is on a buy signal, then the system is on a buy signal and would be in the market.  When all 17 submodels are on a sell signal, the system is out of the market.  So, if the system is on a sell, signal, and submodel A gives a buy signal on a Monday, but you don't see it until Thursday, you should not enter the market.  If submodel B then gives a buy signal on Friday, you can enter the market but you should watch submodel B for a sell signal, and ignore submodel A.  The new table will help you track it.

That explanation brought on some questions so let me try to make it a little more clear.

As stated above, if you miss a buy signal, it is not recommended that you make the trade.  But if any subsequent submodels go into a buy while the system is already in a buy signal, you should buy into the market, then you would stay in the market until that subsequent submodels gives a sell signal, regardless of what the first signal is doing. 

Examples:

#1
Submodel A moves to a buy on May 1, but you missed it.
Submodel B goes buy on may 10 so you buy in
Submodel C goes to a buy May 16 - you are already in
Submodel A goes to a sell May 20 - you stay in until both B and C go to a sell (unless another submodel moves to a buy first).

#2
Submodel A moves to a buy on May 1, but you missed it.
Submodel B goes buy on May 10 and you get in
Submodel C goes to a buy May 16 - you are already in
Submodel B goes to a sell on May 22 - you stay in because of sub C
Submodel C goes to a sell on May 29 - You sell even though submodel A is still on a buy, because you are not in on the submodel A trade.
Submodel D goes to a buy on June 1 - You buy back in

Yesterday it was submodel X that gave a buy signal.  So, if you want to follow the TSP Trader System but you missed the other signals and are currently out of the market, you would buy in and watch for submodel X's sell signal and you'd would ignore what happens to submodels A and W, which are already in the market.  If another submodel gives a buy before submodel X gives a sell, then you'd stay in the market until both submodel X and the new submodel give buy signals.

We've added a chart to help you keep track.  Here's where we are now...
 

		Date of	Effective	C Fund	C Fund
Submodel	Signal	Last Signal	Date	Buy in Price	Stop Price
A	Buy	5/22/2007	5/23/2007	$16.96	$16.62
B	Sell	n/a	n/a
C	Sell	2/9/2007	2/12/2007
D	Sell	n/a	n/a
E	Sell	6/1/2007	6/4/2007
F	Sell	n/a	n/a
G	Sell	1/23/2007	1/24/2007
H	Sell	n/a	n/a
J	Sell	5/1/2007	5/2/2007
K	Sell	n/a	n/a
M	Sell	n/a	n/a
R	Sell	n/a	n/a
S	Sell	n/a	n/a
W	Buy	5/16/2007	5/17/2007	$16.86	$16.69
X	Buy	6/6/2007	6/7/2007	TBD	TBD
Y	Sell	n/a	n/a
Z	Sell	6/1/2007	6/4/2007

n/a - no signals generated in 2007

This past weekend I was at my son's baseball game.  He's on two teams and I coach on one of the teams but this weekend was one where I was not a coach.  When I am coaching, I usually call most of the pitches for our pitchers.  He pitched the final three inning of one game this past weekend, one where I was not coaching.  Since it was a strong hitting team, my advice to him was to mix up his pitches a lot - throw fastballs and mix in several change-ups to keep them off balance and guessing. 

In the first two innings he faced the minimum number of batters (6) striking out 4.  he was mixing his pitches well and they couldn't hit him.  But for some reason, in his third inning, he was not throwing his change up.  Fastball, fastball, fastball.  The other team was able to time his fastball and was finally able to hit off of him.  They scored 3 runs off of him and one big kid hit one a long way over the fence.

I was very proud of the way he pitched and I told him so, but when I asked why he didn't mix it up that inning, his answer was, "I don't know."  My reply was that I can teach you how to throw the pitches, I can also tell you which pitch to throw in what situation, but I can't throw them for you.  You'll have to learn how to do it for yourself.

Why am I telling you this?  It reminded me of my TSP account and the systems we have available.  They are all doing very well.  They tell me me what to do, and when to do it, but they can't make my interfund transfers for me.  Like son, like father. 

Trader Fred's system is in the market, the EbbChart moves quickly and is out of the market today (but going in for Thursday), and the TSP Talk sentiment survey system is out of the market this week.  So we have some mixed signals here.  I will be watching this coming week's TSP Talk sentiment survey results with interest.

You can check out Trader Fred's TSP Trader System commentary his system page. 

That's all I have for today.  I am currently 100% F fund.  See you tomorrow!