Perspectives

TSP Charts: Quicklook 22 March

The SP500 index tracked by the TSP C fund appears to be re-entering its primary price channel (blue lines). Parabolic moves to the upside are not only unsustainable, but have never happened before.  The reversal came quick and we sold into the first hesitation at overhead resistance.  We are now watching support levels in all of our indicators, not just the SP500.

 

22 March 2018 SP500

Draw between the Lines Please

The 200-day moving average and the lower price channel were our target for the first pullback.  While it appears to not have hit our target in the “closing price” chart, it did hit it precisely during the middle of the trading day.  It just bounced before the closing price.

This area is once again technical support – somewhere between the 200-day moving average and our lower price channel.  Support does not mean it is a floor, but at least some buying would come in for a bounce or to slow the descent if we get to that point.  And I think we will get there soon.

Then what?

I’m not a speculator – I am concerned about avoiding large losses for long term investors.  My previous three sell (reduce allocations to equity calls to members) are highlighted by red arrows.  I expect more to come as additional triggers are hit.

Many of our indicators are currently trending toward those trigger points.  The markets may bounce until late Spring but I think we are past peak euphoria.  The economy really does NOT matter in the way many think.  Nor do corporate profits.  Monetary policy and monetary forces do and they are reversing.

This is not your grandfather’s or even your father’s economy or market.  Thirty years of monetary life support is about to get turned off for awhile.  It is going to get real interesting this summer.

Invest safe, invest smart.

 

Michael Bond

TSP & Vanguard Smart Investor

 


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Categories: Perspectives, TSP Charts