Seven Sentinels for TSP

It wasn't that long ago (April 30th to be exact), that the Top 50 had a total stock exposure of 92%. The week after that their exposure dropped a whopping 61% for a total stock allocation of 31%. The broader market fell that week, but not by much (S fund was only down about 0.24%). We had some dip buyers in the group a week later as total stock exposure for the Top 50 rose to 48.6%. But those dip buyers met with stiff selling pressure as stocks plummeted (S fund was down 6.03%) for the week. ...

Last week we saw an incredible drop in total stock allocation for the Top 50. As a group, their total stock allocation fell by 61%. The herd (total tracker) also reduced stock exposure (by 8.82%). Reduced stock exposure proved to be the correct weekly call. Unfortunately, as ugly as the selling pressure seemed, damage was minimal for the domestic stock market. For the week, the C fund dropped about 1.06%, while the S fund only fell about .24%. However, the I fund fared the worst with a drop of 1.6%. ...

The Top 50 had a huge allocation going into the new trading week. Huge. The Total Tracker also had a sizeable shift, but it's the Top 50 that got my attention. Here's the charts:




My historical data is limited, but going back to July of 2010 I haven't seen a weekly stock allocation shift anywhere near as large as the one we got this week. For the new week, the Top 50 dropped their collection stock exposure ...

Last week, the Total Tracker revealed a modest dip in stock allocations (less than 3.5%), but sentiment was much more bearish as reported by our sentiment survey. That bearish sentiment helped stocks tack on significant gains for the week.

This week, the Total Tracker shows more profit taking as total stock allocations dropped again. Bullish levels rose and bearish levels dropped in this week's sentiment survey, which keeps the sentiment survey in a hold (buy) condition.
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Last week we saw a spike in bullishness on the Total Tracker, which showed stock allocations rose by more than 9% for the week. This was in addition to a near 12% jump in stock allocations the previous two weeks. That kind of bullishness is often punished, but not last week. Of course it was OPEX week and that may have been a contributing factor in favor of the bulls (along with liquidity). Sentiment has also not been uniform across some of the more notable surveys either.

Our sentiment ...