The markets started the week with the Dow down nearly 1000 points on Monday and Tuesday. Then on Wednesday, it was up around 200 points until the last hour, when it turned around and dipped into negative territory at the close. Friday’s shortened session again brought additional losses. For the S&P 500 it was more of the same, closing the week at 2632. What was significant about this was that it was below the 2641 support level of 29 October. When an index breaks below one support level, they have the tendency to test the next lower one, which would be in the 2580 area from 8 February and 23 March. The S&P 500 also went into “Correction Territory” this week, down 10 percent from its high. And finally, just to top it off, Bitcoin was down 25 percent for the week, yes week. For TSP TIPS, the S fund had a “Death Cross” on Monday, closing out a Bullish run which began in May 2016. On 5 October we started to reduce our equity (C/S/I funds) exposure from 100 to 60 percent, with a further reduction to 30 percent on 20 October. About a month ago we had our last reduction to 15 percent. Well, given what has occurred over the last month and week, we recommend taking a more cautious perspective to the markets and move 100 percent into the G fund.
The markets started the week with the Dow down nearly 1000 points on Monday and Tuesday. Then on Wednesday, it was up around 200 points until the last hour, when it turned around and dipped into negative territory at the close. Friday’s shortened session again brought additional losses. For the S&P 500 it was more of the same, closing the week at 2632. What was significant about this was that it was below the 2641 support level of 29 October. When an index breaks below one support level, they have the tendency to test the next lower one, which would be in the 2580 area from 8 February and 23 March. The S&P 500 also went into “Correction Territory” this week, down 10 percent from its high. And finally, just to top it off, Bitcoin was down 25 percent for the week, yes week. For TSP TIPS, the S fund had a “Death Cross” on Monday, closing out a Bullish run which began in May 2016. On 5 October we started to reduce our equity (C/S/I funds) exposure from 100 to 60 percent, with a further reduction to 30 percent on 20 October. About a month ago we had our last reduction to 15 percent. Well, given what has occurred over the last month and week, we recommend taking a more cautious perspective to the markets and move 100 percent into the G fund.