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As always Frenchee, thanks for your perspective and feedback. Nice to see similar views that reinforce what's being seen or questioned. Appreciate it.
Happy New Year, Friends!
With the US Dollar starting to base, I'm looking for S Fund to outperform relative to C and I Funds. Check out my comments on the linked charts.
US Dollar, Weekly
Next Leg Up: C Fund or S Fund to Outperform?
C Fund and S Fund have been in a basing mode since May 22 until now. My hunch is S Fund will break out soon and be the place to park the $$$. See my note on the linked chart.
Weekly Relative Performance between C Fund & S Fund
Intermediate-Term Sell Signal
With today's Friday close, I got an intermediate-term sell signal on the weekly C-Fund charts. See the red vertical line on the right-hand side of the chart. The Fast MACD histogram is now in the sell configuration.
C Fund, Weekly Chart
Regression to Trend: 115% Above Trend in November
Quick take: At the end of November, the inflation-adjusted S&P 500 index price was 115% above its long-term trend, up from 106% above the previous month.
C Fund, Regression to Trend
Huge Test of Short-Term Trend on Tap
The heavy red trend line and the green pitchfork regression line are aligned for resistance. Mr. Market's intermediate-term trend is about to be tested.
C Fund, Daily Chart
Happy Thanksgiving to all! (Time to go make some pies.)
Interesting...I track a modified OBV using a 10-dMA. That was designed to give quick response to OBV to better indicate tops and bottoms. I must admit I have never gone back and compared my version to signals that a regular OBV would produce. My version of OBV made a very strong move higher on 27 September. It pulled back from 31 Oct to 9 Nov. It has moved sharply higher since then and still looks bullish. Up-moves have been larger than down-moves over the last month (my Price indicator) and VIX is falling fast enough to give me a buy signal in VIX. Bottom line, right now my long-term ensemble (Price, Volume, VIX and Sentiment) is bullish, although Sentiment is currently neutral.
Elephant in the Room--On Balance Volume(OBV)
Bullish and bearish divergence signals can be used to anticipate a trend reversal. These signals are genuinely based on the theory that volume precedes prices. A bullish divergence forms when OBV moves higher or forms a higher low even as prices move lower or forge a lower low. A bearish divergence forms when OBV moves lower or forms a lower low even as prices move higher or forge a higher high. The divergence between OBV and price should alert chartists that a price reversal could be in the making. A bearish divergence is happening now.
C Fund, Daily Chart
Getting Ready to Take Some Profits
The Fast MACD indicator and its histogram are in a presignal area for a sell.
C Fund Daily Chart
I agree. I track sentiment using Rydex 2x long and short funds calculated as: {5-dma of Bulls/(Bulls+ Bears)}. Rydex traders have been bearish enough to give me a "Sentiment Buy-signal" almost every day since 3 October. I don't act on one signal, but sentiment is an important part of my long-term indicator ensemble. My "correction over" signal was 27 September based on improving internals now compared to the June lows. That signal is hard to believe, but, so far, buying the dip looks like it was the right call.
Last week indicators were slightly bullish. Friday (21 Oct) they turned full on bullish with 18-Bull and 10-Bear. I'm fully invested. This time, will the S&P 500 break thru its 200-dMA? I think yes, but time will tell. It's better to follow indicators rather than thinking too much.
Bearish investor sentiment is the key to sustaining a stock market rally into 2023
https://markets.businessinsider.com/news/stocks/stock-market-outlook-bearish-investor-sentiment-to-sustain-2023-rally-2022-10
Have Enough Folk Thrown in the Towel Yet?
I think so. Thoughts?
NAAIM Exposure Index
When bad news is met by a strong move higher in markets, we interpret it as a very bullish sign. We also note that today was a bullish Outside Reversal Day.
“An outside reversal is a price pattern that indicates a potential change in trend on a price chart. The two-day pattern is observed when a security’s high and low prices for the day exceed the high and low of the previous day’s trading session.”
That chart pattern is also known as a bullish engulfing pattern to the chartists. We’ve seen bearish reversals in August and September; this is the first bullish reversal signal since 1 July. That signal presaged a 13% rally in the S&P 500. Based on my bottom analysis, it appears that this time it may be signaling a more significant move higher – my “time to buy” signal was triggered on 27 September with the warning that the S&P 500 might fall below the 27 Sept close, but probably not more than 5% below it. The Index did close about 2% below the 27 September low. Today’s move suggests we may not dip below the lows again....
...Volumes have been declining since the 30 Sept low suggesting a slowdown in selling and tending to confirm that the bottom might have been in the vicinity of 3600 on the S&P 500. This has continued to support the position that the best move is to “buy-the-dip.” Today volume bounced back to about 5% above the monthly average. Further 80% of the volume was up-volume. Another strong 80%+ up-volume day Friday would be a bullish sign, lending more evidence that 12 October was the final bottom.
I had a buy signal on Tuesday, 27 September. I didn't quite believe it after Thursday and Friday weakness, but this week there have been bullish reversal signals. We may have seen the bottom, although I wouldn't be upset unless markets drop more than 3% below the prior lows. It doesn't seem possible, but Pros say buy when there's blood in the streets.
Fresh S Fund Daily Chart
I hope we can make it up to price's top Bollinger Band before resistance shows up.
S Fund, Daily
On Fridays, I summarize a number of indicators to get a weekly feel for trend. The Friday rundown of indicators turned sharply bearish (20-bear and 2-bull). These indicators tend to be both long-term and short-term, so they are different than the 20 that I report on daily. Here are the Bear signs:
-13 Sept was a bearish, >90%-down-volume day.
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is below 50.
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bearish crossover 30 Aug.
-MACD of S&P 500 price made a bearish crossover 22 Aug.
-26 Aug was a Bearish Outside Reversal Day.
-Smoothed Buying Pressure minus Selling Pressure is falling.
-The 5-10-20 Timer System is SELL; the 5-dEMA and 10-dEMA are both below the 20-dEMA. (The 5-day is below the 10-day so short-term momentum is bearish too.)
-There have been 8 Distribution Days over the last 4 weeks.
-VIX is rising quickly.
-My Money Trend indicator is falling.
-McClellan Oscillator is negative.
-The Calm-before-the-Storm/Panic Indicator warned on 13 September and remains in effect for 6 days.
-The graph of the 100-day Count (the 100-day sum of up-days) is falling.
-The Smart Money (late-day action) is down.
-Long-term new-high/new-low data.
-Short-term new-high/new-low data.
-Cyclical Industrials (XLI-ETF) are under-performing the S&P 500 and falling sharply so I’ll call it bearish.
-S&P 500 is sharply underperforming the Utilities (XLU).
Looks like more downside ahead.
Short-Term Buy Signal on Deck
The Fast MACD (5,35,5) signal line crossing above the MACD line will trip a short-term buy signal. Since we aren't as oversold as we were in May and June, the plan is to go only 50% C Fund if the call happens.
C Fund, Daily Chart
Crypto currencies were down around 10% Friday. I think this is an indicator for the stock market - it looks like risk-off for now. Carter Worth, Worth Charting, was on CNBC, yesterday. He had a research note out that said “Sell Apple.” Apple is a bell-weather for the markets (it’s around 7 or 8% of the S&P 500). If Carter is correct, the markets as a whole are likely to fall along with Apple. Worth had another note out Friday that said the S&P 500 could drop to 3330 if it doesn’t break above its trend line. Here’s the piece in Forbes...
https://www.forbes.com/sites/chuckjones/2022/08/18/technical-analyst-says-sp-500-rally-could-run-out-of-steam-and-fall-almost-1000-points-to-3330/?sh=42f5b750de60
We still see breadth signals warning of a top: the 100-dMA of issues advancing on the NYSE remains below 50% and is now starting to slide down. If that trend continues, it will confirm the end of the rally.
Thanks for your thoughts, B6S.
Let's keep riding this train until Mr. Market pulls the kill switch. I don't know when that will happen, but I'm guessing it will be between 4308 and 4370 on the SPX based on the negative divergence between SPX's price trend and the Force Indicator.
Until the blow-off top, may the Force be with us!
Both Bollinger Bands and RSI are close to an overbought "sell" signal. When they signal in tandem, it is usually at a top. We do seem to be getting closer to a top of some kind and I suspect it will signal the end of the rally, especially if the day is also a high-volume, high-price move up-day. That would qualify as a blow-off top for most traders.
With this morning's strength (so far), I will postpone selling as the Fast MAC-D signal is currently reversed. One thing seems likely, the fat lady is warming up.
Short-Term C Fund Sell Signal Activated
Fast MAC-D flashed a sell signal today. See chart.
Daily C Fund with annotations
OT: 2022 King of the Hill NFL Investorshub Football Pool is about to start
Pick the Winners
Thanks for your thoughts!
The main component keeping me in the market is the Fast MACD (5,35,5) indicator reading. Until the Fast MACD goes on a sell signal, I'm fully invested in C Fund. Let's see what happens around 4178.
Daily C Fund
Thanks Frenchee! Most trend following indicators look very bullish now, but there are some important bearish divergences showing up. Utilities (XLU) & Real Estate are outperforming the S&P 500 by a lot today so, sophisticated investors agree with you. Bollinger Bands are now overbought and so is the overbought/oversold ratio (a breadth measure). RSI is not yet overbought. You will probably be right, but I think 100-dMA (4123) is very possible. 4300 might be possible, but I am less bullish now that a few more bear signs are showing up.
Short-Term C Fund Sell Signal on Deck
The gap between 9 & 10 June is now filled with price overbought. I'm waiting on the Fast MAC-D to flash a sell signal before I pull the trigger, which appears could happen soon.
Daily C Fund Chart
Short-Term C Fund Buy Signal on Deck
C Fund's Fast MAC-D just flashed a short-term buy signal this afternoon. I am waiting for Mr. Market to confirm on Thursday.
Daily C Fund Chart with Annotations
Short-Term C Fund Sell Signal on Deck
C Fund's Fast MAC-D just flashed a short-term sell signal today. I am waiting for Mr. Market to confirm on Friday.
Daily C Fund Chart with Annotations
Thanks Frenchee. Chris Ciovacco discussed the signal at length in his latest market commentary. He noted that on Thursday of last week a Demark count pattern of 9 followed by 13 was completed. That has often signaled selling exhaustion and a reversal to the upside in the markets. It was accurate at bottoms in 2011, 2016, 2018, and in the coronavirus bottom in 2020, but that may be overly optimistic. In previous cases there were policy pivots by the Fed or European Central Banks that were made at those bottoms. This time the Fed is not going to pivot to a bullish position – they are committed to continuing rate hikes and balance sheet reductions.
Chris just says keep an open mind to any move. Markets are at critical levels.
My opinion is that with Sentiment, volume-clues, improvements in New-high/new-low data, all suggesting a counter-trend rally, it would not be a surprise to see a rally “lasting several weeks to several months.” As Chris warns, markets may also fail, so Mondays’ action is critical.
See...
Today, there were 2 important indicators that suggest a strong bounce:
(1) The 52-week, New-high/new-low ratio improved by 3.5 standard deviations. (2) There were 90% down-volume days 5 May and 9 May, however, neither met all of the tests required for a Lowry Research bearish-signal. Both closes were too high. This signal would be very bearish if closes had been lower; but today (Friday) there was a 90%-upside, volume-reversal. The close Friday did meet all the tests for a Lowry 90% up-volume day. I think we have to consider this short-term bullish. Because the 90% down-volume indicators were not as strong as they could have been, it suggests that the selling was not as strong as it could have been either. I suspect that we haven’t seen the worst of the selling, but...
...in the meantime, this bounce should be a significant one that aggressive investors may want to trade. A 50% retracement from the bottom is possible and that would indicate a 9%-10% gain to the 4280 area. Of course, a bounce may be higher or lower. 50% is decent guess for a normal retracement, but this isn’t a “normal” downturn so there are no guarantees.
As of Friday’s close, the S&P 500 is 10.1% BELOW its 200-dMA & 7.1% BELOW its 50-dMA. 7-10% looks like a reasonable rally estimate, too.
Does anyone here dabble in Bitcoin?
Intermediate-Term Contrarian Buy Signal on Deck
INAAIM investor sentiment is ugly--and that's a good thing. When the sellers are exhausted, prices will get bid up.
Look for a Friday close showing the indicator crossing up into the lower Bollinger Band on the referenced chart.
INAAIM Exposure Index, Weekly Chart
If we have an up day on Monday, it will trip a short-term buy signal for C Fund. See the Fast MAC-D indicator on the daily chart referenced below. If the indicator flips to a buy, then my initial target is the 21-day simple moving average of the closing price. If that average is decisively taken out, my next target is the upper pitch-fork line on the price chart.
C Fund, Daily Chart with indicators
OT: Bitcoin is currently off 57% from the high in Nov 2021
$BTCUSD, Weekly Chart
Our job is to be greedy when others are fearful and fearful when others are greedy
Fed Chair Powell has ruled out a 75 bps rate hike, cooling hawkish expectations. By saying neutral rates are between 2% to 3%, markets may see the light at the end of the tunnel. Let's hope it's not a train ...
C Fund, Daily Chart
You are welcome, S.
May the Force be with us!
Thanks Frenchee. I was able to grab the gain from yesterday and I'm glad your analysis supports my projections. Definitely appreciate you sharing what you're seeing!
C Fund Buy Signal on Tap
My buy indicator will be when the Fast MAC-D crosses its signal line.
C Fund Daily Chart
VIX Correlation with C Fund and S Fund
Daily VIX
C Fund Sell Signal on Tap
The sell signal is when the 5-day EMA of price is breached, or the Stop and Reversal (SAR) indicator flips.
C Fund Daily Chart
I stumbled on this article and thought I would share. https://federalnewsnetwork.com/mike-causey-federal-report/2022/03/5000-new-tsp-options-is-there-an-esg-fund-for-you/
My indicators are strongly suggesting that the bottom was the 14 March test of the low with S&P 500 at 4173. We'll see. If the S&P 500 goes up another 1% or so, I'll be a buyer.
C Fund's 31-day SMA providing resistance in the intermediate-term downtrend
Daily C Fund Chart
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Background. The Thrift Saving Plan (TSP) is a retirement savings plan for current and retired federal civil service employees. The thrift savings plan is a defined-contribution plan designed to give federal employees the same retirement savings-related benefits that workers in the private sector enjoy with 401(k) plans. A Summary of the TSP can be found at this link tspbk08.pdf
Purpose. This Board contains market-timing commentary and discussion about the Government's Thrift Savings Plan (TSP) and the investment choices.
References. The TSP Web address for asset transfers and asset allocations is Home | The Thrift Savings Plan (TSP)
G Fund The G Fund invests in short-term U.S. treasuries and functions as a money market account. The principal is guaranteed.
S Fund The S Fund - the Small cap is a bit of a misnomer for this Fund. It is all of the U.S. stocks that are not included in the S&P 500. There are some relatively large companies in this Fund. It is a compilation of mid-cap stocks and small-cap stocks. It tracks the Barclays Extended Market Index Fund, which tracks the Wilshire 4500 index. Investing in C and S funds is investing in every tradable U.S. company. The Vanguard Extended Market Index VIPERS (VXF) is a proxy for the S Fund.
C Fund The C Fund invests in the Barclays Equity Index Fund, which tracks the S&P 500, the 500 largest U.S. companies traded. The S&P Large Cap Index ($SPX) is a proxy for the C Fund.
F Fund The F Fund is invested in the Barclays U.S. Debt Index Fund, a bond index fund that holds a representative sample of the bonds in the Lehman Brothers U.S. Aggregate (LBA) index. Economic indicators and money supply affect interest rates. Interest rates influence the movement of this Fund. When yields move lower, bonds go up in price, and the F fund goes up in value. When yields increase, bonds go down in price, and the F fund decreases in value. The iShares Core Aggregate Bond ETF (AGG) is a proxy for the F Fund.
I Fund The I Fund - The International Fund follows the *EAFE index. This stands for Europe, Australia, and the Far East. The EAFE countries are Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. If you surf through any of the financial networks on TV at night, you will see quotes on these exchanges, and those results affect the next day's I fund price. The I Fund also carries the risk of foreign currency fluctuations. The companies' stock prices in the EAFE index are expressed in the currency of each respective country and then converted to U.S. dollars to determine the value of the EAFE index. Thus, the value of the EAFE index will rise as the value of the U.S. dollar falls - and fall as the value of the U.S. dollar increases - about the currencies of countries with companies represented in the EAFE index. The iShares MSCI EAFE ETF (EFA) is a proxy for the I Fund.
* On some days, the change in the I Fund share price reported by the TSP does not match the change noted for the Morgan Stanley EAFE (Europe, Australasia, Far East) index, which the I Fund tracks. This happens when the Board's investment manager, Barclays Global Investors (BGI), reprices its EAFE Equity Index Fund, which the TSP invests, after closing the foreign markets. This process, known as "fair valuation," occurs when there are large U.S. market or currency movements between the time the foreign markets close and 4:00 p.m. when BGI's share prices are determined. Fair valuation ensures that traders cannot "market time" the I Fund by making investment decisions based on the "stale" prices, thus diluting the returns of other participants who invest in the I Fund. Because the EAFE uses the foreign market closing prices to calculate its values, its price change will differ from the TSP on those days.
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C Fund: Regression to Trend
P/Es & Yields on Major Indexes
American Bull NYSE Market Timing
DecisionPoint Market Scoreboard for C Fund
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