10OCT19 -- POTENTIAL MOVE TO CASH SIGNAL

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Folks,

With the close of the markets today, Tuesday, October 19th, we have a move to cash signal for EFA/I-Fund, SPY/C-Fund, and although a weaker signal, for the VXF/S-Fund.  Note that GGT has NOT confirmed this transition -- these signals are being derived from Elder's 13d Force Index method as well as my 13/34d slope method. 

First, here is what GGT has to say about the TSP ETFs:

As far as GGT is concerned, we are still above historical, optimized price and volume levels so holding these ETFs is still a valid position (obviously with the exception of AGG/F-Fund).

When we dig deeper using a different method, we get a different picture.

EFA / I-Fund:

• Price closed below the 13d EMA after obeying this line for 7 weeks.  For the conservative, this is a sell signal.  For the aggressive, if tomorrow has any point in the day below today's low, then we have a confirmed sell signal.
• Elder's FI(13) signal closed negative.  This is an automatic sell of any security.
• MACD Histogram has moved negative.  This is an automatic sell of any security.

While not shown in the graph above, the slope of the 13d EMA has crossed the slope of the 34d EMA from above, also signalling severe weakness.

The link to this chart is here.

SPY / C-Fund:

While the price of the SPY did not close below the 13d, we do have two indicators shown that signal danger for this equity:

• Elder 13d Force Index is negative, which is an automatic sell signal
• MACD histogram has just transitoned negative, which is an automatic sell signal

Again, while not shown, the slope of the 13d EMA is crossing the slope of the 34d EMA from above.

These three indicators, taken together, are enough for me to transition to cash for SPY / C-Fund. 

The link to the SPY chart is here.

While we're here, we might as well take a look at VXF / S-Fund:

The price closed right on the same value as the 13d EMA, so technically, it has not violated the 7-week rule.

The Elder FI(13) value is still positive.

Not shown is the crossing of the slope of the 13d EMA and the 34d EMA from above.  This is an automatic sell signal.

The MACD histogram is newly negative, which is an automatic sell signal.  Combined with the slope 13x34 from above, we have a confirmation. 

The link to the VXF chart is here.

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I am a conservative investor so I will sell my positions in EFA/I-Fund, SPY / C-Fund, and VXF / S-Fund and transition everything to cash / G-Fund.  The markets may recover and move higher from here, in which case we still can use one of our transfers to get back in the market and we may miss a couple of days of run up.  I had rather do this than lose the 6% that we have gained since the beginning of September.

Place your order by 9 a.m. EDT if you want TSP to enact the transfer on the close of business on Wednesday.

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Remember, you are responsible for your own trades, not me.  Please do your own diligence.

Regards,

pgd