Ed the Fed's Account Talk

[Ed_the_Fed]

I elected to move funds via IFT to the G (75%) and F (25%) COB today. I think the market is overbought and should have a pullback.

[Ed_the_Fed]

The I fund has now pulled back about 25% from its most recent leg up. My high end target for the pullback was 20.54 and that was hit yesterday. I am not yet ready to jump back in. The pullback could continue as evidenced by how rapidly it fell to 20.54. I am staying out of the C, S and I until I see evidence of an end to the current pullback. I don't think it will fall this far but a pullback in the I to 19.3 is not out of the question at this point. I will be watching closely as I protect my hard earned gains over the last year. I am currently G 75% and F 25%. I am contemplating what to do about the F portion this weekend. I will either keep what I have or move it all to G on Monday.

[nnuut]

Yep, I was in 20% "F" until yesterday afternoon. Good-bye "F" fund, I don't trust you, or like you at all. Robber!!!!:nuts:

[Ed_the_Fed]

Markets were looking good the first two hours this morning but now its all RED. I will delay a move into the I until this all clears up as it looks like the I will lose a chunk of change today. The S is down also but only about 0.20%. The I looks like it could lose as much as 0.5% or more today. I am currently in the S and will ride this out for another day.

[Ed_the_Fed]

In my 5-13 post I stated that the I could pull back to 19.3. I didn't say it would, but I did say it was a possibility. I should have listened to the warning bells in my own head. I jumped back into the S today and lost a good chunk of change for it. Now I have transferred into the I (80) and S (20) effective for tomorrows trading. I hope we have hit the bottom of the I pit. I should have stayed in the G until I saw an upward confirmation instead of guessing that we had hit a bottom. No one to blame but myself! Sometimes I feel like the TSP is monopoly money. Maybe that makes it less painful for me when I take large losses like today.

[Ed_the_Fed]

The I has now fallen to 19.1 but today looks to be up. Hope this is a major support level and not an iterim one. I has support range at 18.93-18.99. If that doesn't hold, next one looks to be in the 18.22-18.29 level. That would be painful!

On the S, 16.94 could hold as their is some support in the 16.95-16.96 area. Next level of support looks to be around 16.79. If that doesn't hold, look out below.

[Ed_the_Fed]

I just moved all my money into the G. We are overbought on all market indices and are due for a pullback. It may not be a massive one but we are certainly due for one. RSI's on SP500, EFA and Dow Willshire 4500 completion index are all near that critical 70 level. I will most likely sit in G until this pullback occurs and runs its course.

[Ed_the_Fed]

I am really on the fence but have elected to move to the G. The EFA bounced back and recovered over half of its early morning losses but has now turned down again. Looking back at past big drops in the EFA of over a point have generally followed with two or three additional down days. I think the market has been long overdue for a correction and this may be it.

[fabijo]

I am really on the fence but have elected to move to the G. ... I think the market has been long overdue for a correction and this may be it.

Whew! Last time you said something like this was in May of last year. You were spot on:


I elected to move funds via IFT to the G (75%) and F (25%) COB today. I think the market is overbought and should have a pullback.

[Ed_the_Fed]

I continue to keep all of my hard earned $ in the G fund. I don't like the high volatility in the market right now. Up 100 points one day, down 100 another. Hopefully, the market shakes out in the next few days. I am watching for a buying opportunity in the I fund, possibly tomorrow or Thursday but view this as a short term buy. Not sure about long term.

[Ed_the_Fed]

I am not real sure what to make of the markets these days. I keep waiting for a long overdue correction that never comes. Meanwhile, I see my opportunity to make money going up in smoke while I sit in G. Effective COB 5/25/07 I am jumping back in 50S, 30I, 20C. I am looking for a quick 2% gain in the S Fund in the next week or two. I will have my finger on the button to get out if the market should turn ugly.

[Ed_the_Fed]

Wow, S Fund rocked today. Mr S Fund, my retirement account thanks you! However, keep your finger on the bailout button. A major correction is long overdue. I will monitor the first couple of hours in the morning and make a tough decision about stepping back over to the G or staying in the high risk stakes game.

[Ed_the_Fed]

COB 5/31 I will be moving to 50G 50I. My 2% target for the S fund was met in just three days so I expect a pullback/profit taking. C looks like it might also be topping. I-Fund looks very interesting. It has been somewhat rangebound lately so a breakout upward is a possiblity (of course it could also break to the downside hence the risk of investing in general!). I am playing only 50 in the I. If a breakout occurs, I will probably go all in and reveal a pair of bullets for my hold cards!

[2moryrs]

Hi, Ed the Fed guy.
Where do you watch the changes in the TSP funds?
2moryrs.

[Ed_the_Fed]

After a pretty nice run up this week, I have to believe profit taking is coming. I am moving over to 50G 50F COB 6/1/07. We may even see the profit taking later today, but hopefully not until Monday where I am safe and sound and have protected my recent earnings! I am watching the I fund rather closely as the EFA has been range bound for a few weeks. An upside breakout could be worthy of a nice profit in our accounts. I will probably move to 100I sometime early next week.

[Bullitt]

EFA broke out of it's past month trading range, but it's lacking conviction today due to low volume. We'll see how it finishes this week.

[Ed_the_Fed]

While it is not possible to time the market or predict what it will do, I think you can make some logical decisions based on what it is doing. The EFA (my I fund tracker that I use) has pulled back 1.86% from its recent high to this mornings low. The DWCP (my S fund tracker) has pulled back 1.69% from its recent high to this mornings low. At this juncture, I think the market is going to do one of two things. One is that this is just another minor pullback and we will continue to see nice sweet gains in our funds. The other is that this is finally the beginning of the long overdue major market correction which we all dread. Since I have felt the correction was coming back in January, I still believe we have a major downleg ahead of us. That being said, I think we should see a bounceback on Thursday or Friday and so I have jumped back into the S 70% and the I 30%. If the major correction is in fact coming, I would expect another drop following the bounceback. If it is still an upward market, I will simply ride the S and I for another 2-3% ride. I think Friday and Monday will be important to watch what the market does.

[Ed_the_Fed]

Ouch, major market pain today. Wish I had stayed out one more day but oh well. I would like to believe we can expect some sort of bounceback on Friday and am staying in for now. If Friday is down big early, I will have to ponder my next move. I need to set aside some time this weekend to ponder the charts.

[Ed_the_Fed]

First off, you have to love RDO's. I am sitting at home and was able to do some chart analysis this morning. The current pullback in I and S looks very similar to the pullback in late February/early March. While nothing in the markets is guarenteed, I am very concerned about a third wave down (for those of you who follow Elliott wave analysis). If the third wave plays out, I would expect another drop in both the I and S (taking C with it) on either Monday or Tuesday and continuing until the RSI hits 30 or less. Back in March, this was three down days in a row after the minor one day correction up. Today could be that one day up so that is why I am so concerned and want to protect my hard earned investments. Since the drop could be substantial, I am not willing to risk a wait and see on whether Monday is an up day. I am looking for the RSI to reach 30 before I jump back into stocks. If Monday is a huge up day and sends the RSI above 50, I will reconsider my charts as that would most likley negate the third wave down and possibly signal another upward spike. We of course all want that spike but the market has been up for so long that is long overdue for a pullback. RSI as of right now is 42's on the I and 46's on the S.

[Ed_the_Fed]

I will be holding in the G day for at least one more day. Need to see where the I, S and C decide to go this afternoon. RSI's are holding in the upper 40s for all three (46.73, 48.74, and 49.55 as of 11:24am). I think we may either retest the lows from Thursday with a nice bounce off and another bull leg up or we may see a further breakdown below Thursday's lows. I think we may still see a drop down to RSI's in the low 30s before this pullback is done. I am taking the conservative play on this one.

[Ed_the_Fed]

I have decided to hide in the safety of G for a few more days. I don't like the looks of todays charts. We will see how the market reacts tomorrow. RSI's are still in the 40's for all three funds. For a true shakeout, I would like to see them hit 30 and then bounce back up.

[Ed_the_Fed]

I was out of town last week on business travel. Looks like I picked a good time to be away as I am hiding in the G. This week still bothers me. Could this be the beginning of a major correction? I will stay safe in the G until I feel comfortable engaging again.

[Show-me]

We are wondering the same thing, only some of us are in. Luck you and glad your back.

[Ed_the_Fed]

Finally, we saw a breakout above 1540 on the S&P500 that held. This is a bullish signal so I am moving back into the market 40C 30S and 30I. I am looking for at least 2% gain on the C. Hopefully even more in the other funds.

[Ed_the_Fed]

The S&P500 has held well above the 1540 level which it finally broke through. Today was a great day with a lot of positive earnings reports. I think the market should continue to be up for the next few days. I still think this never ending upward march has to end soon. Watch for a blowoff top with several big up days in a row. That would be a sign that the big selloff might be coming. Unfortunately, we don't always see the blowoff top. I have made a IFT to the I fund for Friday. Hoping the I fund will have a few big up days for me.

[2moryrs]

Thank you for your reply. I still don't understand alot of the financial talk but I keep studying and it slowly comes to me.

[Ed_the_Fed]

I have decided to move to the G fund for tomorrow. I see three tall white candles on the DW4500 chart totalling over 30 points. If you look at the charts, this typically is the maximum amount the fund will go up before pulling back. A retest of the low at 626.97 is also possible. However, the strength of the recent upsurge leads me to believe we won't retest. A 10-15 point pullback will be a good re-entry point IMHO to the S fund to be hopefully followed by another 30 point surge up. July hurt me as it did many others and now I am trying to regroup.

[Ed_the_Fed]

Boy am I a happy camper that I jumped out of the market at Wednesday COB. My charts are telling me to jump back into the I fund for Monday but my gut feeling is to wait at least one more day. I need to see a definite bottom established in one of the funds before I re-enter. I think we may still see a retest of the 1432-33 level on the SP500 (August 6 low), EFA level of 77.53 (August 3 low), and/or DWCP level of 626.97 (August 6 low). EFA is probably close enough to its low now. If that level holds, we should see a nice rebound up. I see the market has now gone green in both the DWCP and the SP500. Perhaps this will serve as the bottom. I will want to see follow through on Monday before I re-enter.

[Ed_the_Fed]

Looking at charts this afternoon, I think the DW4500 is looking pretty good. If the Friday low can hold and we see positive upward movement above Wednesday's 665.91 high, then the S fund could have a nice ride back up to the mid July high of 703.93. That is over 8.5% above the current price! I would take that for sure!

The EFA chart looks pretty ugly at first glance. It gapped down on Friday so it may refill that gap in the short term. It is sitting on the 200 day MA so that may hold. Since it has dropped through many support levels, the next one I see is around 75.25. If that doesn't hold, the next one is all the way down at 71-71.5 range. Hopefully, the 200 Day MA can hold and the EFA starts it way back up. I do see a five wave up, three wave down pattern in place if the current low holds. That could mean the start of a new five wave pattern up for anybody who follows Elliott Wave Theory. If we can get back to the mid July high of 83.8, that would represent over a 9% gain from current level.

The SP500 chart looks a lot like the DW4500. It came very close to retesting its August 6 low on Friday. I would expect a bounce up from here. A positive sign would be if it trades above the August 8 high of 1503.89. It could then run back up to its mid July high of 1555.90. That would represent a 7% gain over current price level.

I am leaning toward a 50/50 split in the I and S COB Monday. I will have to see what the market does on Monday morning and make my decision then.

[airlift]

Thanks for your input Ed!

[fabijo]

Ed, great thoughts. I also have noticed that in the recent drops, the C Fund returned and surpassed to its previous highs faster than the S Fund.

[Ed_the_Fed]

Fabijo,

Thanks for that observation on the C fund. I may have to consider a three way equal split between C, S and I.

[Ed_the_Fed]

Keep an eye on the August 3 lows in the DW4500 and the SP500. We may very well test them today. DW4500 level of around 632 and SP500 level of around 1433 look to be support. If the market breaks below these levels and doesn't bounce back before market close above these figures, we may see some more downside movement this week. 1417 and 1375 (March) look to be the next support levels on the SP500. That represents another 4% drop down to the 1375 level. On the DW4500, the next support level is around 622 (January and March). The March support level low on the EFA is all the way down at 70.90. That is almost 7.5% below current EFA price. Tread with extreme caution. This is scary. I will probably stay in the I one more day and look for some sort of bounce tomorrow.

[Ed_the_Fed]

I will stay in the I over the weekend in the hopes of catching a bounce from Europe and overseas on Sunday night. Will probably move to 100S COB Monday.

[Ed_the_Fed]

I think we may be in an upward swing in the markets going forward. It is possible that we could retest the recent lows before we head back up but I think that is not real likely. I can't decide if I like the I better or the S so am split 50-50 and will remain that way for now. Both took pretty decent poundings of late so I expect both will be good investments in the short term. I think they will move in tandem but if one lags the other, I may jump into the laggard looking to get the extra few pennies when it catches up!

[Ed_the_Fed]

I decided to try and catch the +FV in the I tomorrow. I am not sure if this is a good move or a bad move but will try it nonetheless. Now that USM's have gone green, I am hoping for a follow through on the overseas markets tonight. COB 8/30 I am 100I.

[Ed_the_Fed]

The DJW4500 chart is looking pretty good for next week. We are currently setting higher highs followed by higher lows so I would like to see the August 28/29 low of around 638 hold. If today's low holds on Monday at or above 638, I think we could see a run up to 680 or higher during the week. That is about 4.5% above the current low. 685 or 690 would not be out of the question at this point.

I have made an IFT for COB today 9/7/07 to 100% S. I am becoming frustrated with the +FV and -FV's going on in the I fund.

[Birchtree]

I'll be glad to see you move up past those cooters that are blocking your lane.