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Coolhand's Market Analysis

Has Anything Changed?

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Happy New Year to everyone! I wish good health and prosperity to all this New Year.

And now that 2014 has begun, has anything changed in the market? We did see some selling pressure the first trading day last Thursday and it was enough to cause a weekly loss across the TSP stock funds (C, S, and I). It certainly wasn't enough to get excited about and I suspect it was largely profit taking from those traders and investors who wanted to see how the New Year started out before taking more risk.

With the New Year comes a reset of the Auto-Tracker. It generally takes a few weeks for things to settle out with respect to the Top 50. The Total Tracker (Auto-Tracker) doesn't change much other than the usual additions we see each year. If you are one of the new TSPers on the Tracker, welcome! Let's take a look at the charts:

Allocations / Interfund Transfers-2013-top-50-trend-jpg

The folks we are used to seeing in the Top 50 now find themselves in unfamiliar territory. Especially given they were largely planted in the S fund, which like the other stock funds were down last week. But that doesn't mean much one week into the New Year.

Allocations / Interfund Transfers-2013-total-tracker-trend-jpg

The Total Tracker is mostly unaffected by the reset. Stock allocations rose 1.74% from last week to a total stock allocation of 58.15%. That isn't particularly meaningful this week given we had about 50 new TSPers getting tracked.

Allocations / Interfund Transfers-spx-png

Price on the S&P 500 remains well above the cloud and the conversion (blue) and base (red) lines remain above the cloud. Same for the lagging line (green). These remain bullish indicators. Price did fall back from the rising upper trend line, but so far it has been a modest pullback. MACD and RSI both turned lower, but remain positive. Note that volume is still low, so what selling pressure we did get last week was not indicative of anything serious by this measure.

Allocations / Interfund Transfers-emw-png

The Wilshire 4500 remains well within the rising channel. MACD has leveled off, but remains very positive. RSI backed down a bit, but it too is still positive. I am watching to see if price can remain above that intermediate term support line (about 975). That could give us a clue where price may be headed in the near term.

Allocations / Interfund Transfers-efa-png

The EFA (similar to our I fund) still looks bullish as price remains above the cloud and all indicators are bullish.

It is hard to argue with the charts, which continue to look very bullish. Sentiment isn't as bulled up in our survey as it has been, which is a plus, but other surveys such as NAAIM and Investor's Intelligence are still showing a lot of bullishness. That is "normally" bearish for the market. I could be that we'll see a delay in any potential selling, but I do think underlying market support is largely responsible for the continued bullish action in the major averages. That has not changed at this time.

On another note, I am a bit wary of how the new Fed Chair will be received. I realize she (Yellen) is suppose to be very dovish on monetary policy, but that can be used against the bulls in the shorter term (weeks) if they throw caution to the wind. Longer term, I am bullish and so I will maintain at least a 50% allocation (I am at 60% now) in the stock funds. I am holding 40% cash (G fund) just in case a buying opportunity does present itself in the days/weeks ahead.

This is my last "regular" blog as Coolhand's Market Analysis starts next Sunday the 12th. I will still post a blog on occasion, but most of my time will be spent on the premium service. I hope you will join me there.

To see this week's full analysis, follow this link TSP Talk Members' Home Page.

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  1. OBGibby's Avatar
    Sorry to see you go behind the curtain! Have always enjoyed your blogs. What are the prices for your premium service? Tom's pricing chart just shows yours as a free trial right now.
  2. coolhand's Avatar
    Thanks for the support. It will be $18.95/month or 189.95/year.
  3. MrJohnRoss's Avatar
    Excellent post Jim.

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