And a new year begins ....
I'm starting 2011 in cash, having come off of a two week vacation over the holidays. Volume within this time has been drying up, and I must say it has been doing so rather dramatically, so the availability of buyers and sellers has been limited. It's never a good time to play the market when this is occurring, as the numbers can go against you as well as with you, so my conservative approach is/was simply to jump to the sidelines.
Overall View - 3-Fund
Here's a bird's-eye view of an index created using EFA (I-Fund), SPY (C-Fund), and VXF (S-Fund). Right-click on the image to open in a new tab or window:
In a macro sense, the composite index is bullish. The daily highs are above the 13d EMA, causing Bull Power to be positive. Reinforcing this is that the daily lows are above the 13d EMA also, resulting in Bear Power being positive, which is bad for the bears. Two different methods of calculating Elder's 13-day Force Index are "green", telling me that both these methods are resulting in numbers that are positive. This too is bullish. The 3rd ribbon from the top is also green, which is the 2d Force Index, and it is telling me that the index pulled back on Friday, indicating that we can enter the index (if this were possible) on Monday if everything moves higher.
A crack in the bull ice which may prevent me from entering a full position is shown in the MACD window under the ribbons. What you see there is that the MACD Histogram is underwater (below 0), indicating a loss of momentum in the index. This is visually seen too by the gradually decreasing MACD and MACD Signal lines -- they have recently crossed (histogram moves negative) and are trending downward.
On a bearish side the slope of the 13d EMA (red) is below the slope of the 34d EMA (black), and both are pointing down. This too confirms/validates the loss of momentum. If they cross below 0 we'll have no doubt about the portfolio nor where we want to be positioned. As a personal note I rarely enter a position when the slopes are pointing downward ... This all being said, the slope values are still positive, so if they turn upward in their direction, I'll move back in.
Finally, the portfolio is still bullish overall. The prices are above the 13d EMA, and all of the longer EMAs have a steady, upward-pointing direction to them.
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I'm simply going to wait for a signal to re-enter, most likely the slopes of the 13d and 34d reversing and starting to move upward. Stay tuned.
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Remember, you are responsible for your own investment decisions, and I am not. Please take ownership for your actions.
Regards,
pgd
I too help manage my wife's TSP as well as my own, the dilemna I have on the conservative side is planning for the rare Black Swan market events, while I might want to risk them on my own account, my wife would not be as resigned to the drastic consequences of such an event to her TSP account.
ReplyDeleteAlso, below is the verbage on the interfund transfer rule from the TSP site, note if 1 of the first 2 transfers in a given month are to G fund it will count against the limit of 2 per month.
Each calendar month, your first two interfund transfers may redistribute money in your account among any or all of the TSP funds. After the first two, your interfund transfers can only move money into the G Fund (in which case, you will increase the percentage of your account held in the G Fund by reducing the percentage held in one or more of the other TSP funds). If you have more than one TSP account, these rules apply to each account separately.
Thanks for the site,
Ed S.
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