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Summary
AGG / F-Fund: Long, but Elder FI(13) is negative and prices are not appreciating.
EFA / I-Fund: Cash, but appears ready to move Long if market continues higher.
SPY / C-Fund: Long, with the signal occurring this past Thursday.
VXF / S-Fund: Long, mature, but nothing indicates any danger at this point.
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A question came in this past week about TSP portfolio updates. I've not been paying attention during the week, specifically looking at signals only on the weekend. Call it my need for "strategy captains" is the highest it has ever been, so if you have Excel 2007 and know how to run macros, let me know. Be advised that I will ask you to sign a non-disclosure agreement.
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AGG / F-Fund Status
AGG / F-Fund signaled New Long on 2/25, with a closing price of $104.51. I didn't catch this change until I ran updates the night of 2/26, and I posted them in the GGT web site the same weekend. This past weekend saw a close on March 5th of $104.39, so although AGG / F-Fund is still showing a long status, we've not had any appreciable increase in price. Let's see if we can determine why.
As with all of my charts, right-click on the image to open in a new window or tab, as the most relevant data will be shown on the RIGHT side of the graph. Make sure you can see the numbers on the RIGHT side of the graph.
There are a number of colored "ribbons" across the top of the figure; the 4th one down from the top is labeled "Force Index 13 DEMA" and represents Elder's 13 d EMA on (Volume * Price Change). What is important here is that it just turned "RED",
indicating that we've got some problems with volume and/or price change with AGG / F-Fund.
The white area, which is entitled "65d Slope EMAs", shows a number of EMAs that are relatively flat. This area of the chart plots different EMAs of the slope of the 65d price line. Think about that. The 65d price line is 13 weeks / 1 Quarter, and the 2d line (red) that you see bouncing all over is literally the 2d EMA on the slope of this price. When this value is positive, the slope of the 65d EMA of price is moving up, e.g., prices are appreciating, and when this value is negative, the slope of the 65d EMA of price is moving down, e.g., prices are depreciating.
If you look closely, you can see that the 2d EMA (red) is bouncing between $0.012 (established on 1/29) and -$0.0125 (established on 2/22). Now look closer at the 8d EMA (green), 13d EMA (blue), and 21d EMA (pink). All are moving TIGHTER than this 2d, and all are bouncing above and below 0.
Until we see these move above 0 and point upward it will be very risky to commit monies to AGG.
I do not intend to move long on AGG / F-Fund until it shows a definite trend upwards.
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EFA / I-Fund Status
EFA / I-Fund has been in trouble for some time, and continues to indicate a "Cash" status as far as GGT is concerned. The primary rationale for this recommendation is easily viewed in the chart above, and specifically, in the 65d EMA window.
Although the different trend lines are pointing upward, observe the scale on the right of this graph: every one, with the exception of the 2d EMA (red), is well below $0.00. This means that as far as the 8d EMA, 13d EMA, and 21d EMA of the slope of the 65d EMA is concerned, we're still losing money on EFA, BUT it certainly has been improving.
Overall, EFA / I-Fund does look like it is about to move long, so if we see continued strength in the market, we will move long on this ETF.
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SPY / C-Fund
When I looked at the SPY / C-Fund last weekend it appeared that we were hitting resistance at the 50d MA, so I was not too concerned. SPY / F-Fund signaled "New Long" this past Thursday, March 4th. Is it too late to get into SPY? No, not if the market continues higher.
Note the 65d EMA window. ALL the EMAs are positive in value, which indicates that the slope of the 65d line is in a sustained up trend.
I plan to move monies into the C-Fund tomorrow (3/8/10).
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VXF / S-Fund
VXF / S-Fund moved long on 2/17/10, and I did not post this change (although it was evident in the 2/26/10 update that I posted last weekend). Nevertheless, we are clearly in an uptrend with this ETF / S-Fund, as measured by both the indicators in the 65d EMA window as well as the slope of the 50 and 200d EMAs in the lower window.
I intend to move into the S-Fund on Monday, 3/8/10.
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Allocations
The question is one of how much to allocate. If we take a look at a 1-month performance, we have the following results:
Across the top of the graph we have the 1-month performance as:
- AGG : -0.01%
- EFA: +6.8%
- SPY: +7.12%
- VXF: +11.41%
I've outlined in the past the methodology to allocate monies. Recall there are two portfolios, one that uses all 4 ETFs/Funds, and one that only uses 3 ETFs/Funds, dropping AGG/F-Fund from the mix.
IF YOU INVEST IN THE 4-Fund Portfolio, then your allocations should be:
- AGG / F-Fund: 3% (remember that this is looking very weak)
- EFA / I-Fund: 27% (remember that this is presently in CASH but is improving)
- SPY / C-Fund: 28%
- VXF / S-Fund: 42%
IF YOU INVEST IN THE 3-Fund Portfolio, then your allocations should be:
- EFA / I-Fund: 27% (remember that this is presently in CASH but is improving)
- SPY / C-Fund: 29%
- VXF / S-Fund: 44%
Again, I intend to move into SPY and VXF tomorrow, Monday, 3/8 with the allocations shown above. The balance not invested will be held in Cash / G-Fund.
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Remember, you are responsible for your own investment decisions, not me. Please do your own diligence.
Please read my blog at http://greekgodtrading.blogspot.com; it contains relevant indicators that this market is very overbought and entry into long positions now may be very risky.
Regards,
pgd
