Last week, both the Top 50 and the herd (Total Tracker) dropped their collective stock allocations by more than 10%. For the week, the C fund dropped 1.08%, while the S fund shed 1.64%, so both groups had a shift in stock allocation that was in-line with the market's action.
This week, both groups increased their stock allocations. Let's look at the charts:
Going into the new week, the Top 50 increased their stock allocations by 1.62% for a total allocation of 13.26%. That's pretty bearish actually, even as our sentiment survey is neutral. So this group is not aligned with our sentiment survey.
The herd on the other hand, increased their collective stock allocations by 8.59% to a total stock allocation of 54.93%. That's much closer to our sentiment survey results and shows that as a group we aren't overly bearish. That could be a problem in a bear market. My guess is that some TSPers jumped into the market on this past week's weakness, especially now that the broader market is near the bottom of its current trading channel. That may work again and I would love to join them, but it's a trade that's not without significant risk.
As I mentioned in Friday's blog, the Seven Sentinels are now in an unconfirmed sell condition and in a bear market I wouldn't stick around for confirmation in this kind of volatility. Momentum has turned to the downside once again, but of even more concern to me is BPCOMPQ is on a sell and hinting at falling further.
I've been in the F fund since Aug 22nd and do not yet see a decent entry point back into stocks. At least not one with acceptable risk.
