Good Morning
The markets managed to push higher and reach the 1590 level I highlighted in a previous blog, this assessment was based on previous areas of resistance and the Bollinger Band level which has now been pushed to 1595. Afterwards prices met resistance, taking the noon-time nap, and then fading into the close. However, they did manage to hold unto enough gains to keep the bears at bay at least for Thursday. The S&P 500 closed .40% which was within my estimate based on the Thursday’s Stats blog, it was a 50/50 shot, I flipped a coin and it went my way.
Here is an impressive display of multiple chart patterns; from left to right we have a Diamond Bottom, Bear Flag, V-Bottom, 50% Dead Cat Bounce, Inverted Head & Shoulders, & Tilt Flag. What’s more impressive, this is all within the time span of 17 days on the 30 minute chart and all patterns met their price objectives. Unfortunately I didn’t have the time or funds to play all of these patterns, but I did manage to play the Bear Flag using TZA as a proxy.
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I’ve stated I expect the markets to begin pulling back this last Wednesday or Thursday, thus far it hasn’t happened, and I’m hoping it doesn’t. One thing that makes this April unique when compared to the typical April is that we get 2 extra days. Since 1993 there have only been twelve Day 21s and three day 22s. This could impact how the beginning of May plays out, I’m thinking there is potential to rally into the end of the month then thud in May, or perhaps rally the entire week, then drop off from there. Truth is I don’t know. Just like most of us here, my goal is to eek out as much gains as possible, then sidestep the drop, and I’ll be in a better position to do that next month with a fresh round of IFTs.
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I always love to give the I-Funders a hard time, from my perspective playing the I-Fund is like betting on red & black on a roulette table and coming up with zeros. To throw you foreign investors a bone, the 25 day performance between the S & I funds is running neck & neck. This is a chart of the TSP’s CSI fund over the last 25 days, while S & I have the same positive average returns, the I-Fund leads in the Total average returns & has better negative average returns.
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With a 60% winning ratio over the past 25 days, Friday’s average returns show a strong positive bias in the short-term, but it does fade out as we go further back in data. If you’ve been reading this blog then you’ve probably figured out Tuesday & Friday are currently the strongest days of the week.
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With the severe restrictions of limited IFTs (and the 12:00 noon cutoff) have on our accounts, it’s important to understand how the markets behave throughout the day when under bull market conditions. This is a cumulative 30 minute chart of the last 13 Fridays, showing us how the typical day tends to play out. As you can see, most of the money is made or lost in the first 30 minutes of trading, then it gradually steps down as folks settle in before they head out for lunch. Most of the mid-day trades flat, then we gradually ramp up into the close. An important key to understanding bull market behavior is that the last 30 minutes almost always close positive. When this trend starts to change, it usually means we are transitioning into bear market conditions indicative of a pullback.
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Sadly, I go back to work next week. I’ll be doing a May blog this weekend but after that I’ll be toning it down a bit as cranking out stats can be a time-consuming task, so I hope you enjoyed it while it lasted.
Take care…Jason
---------------------DISCLAIMER--------------------
The majority of this data is based off the S&P 500's past prices, typically over the last 20 years. If this data does not come from the S&P 500, then I will state what index it is derived from, otherwise assume it is of the same source. While most of the data is computer generated, much of it is still done by hand and is therefore subject to the occasional human error. Past data does not guarantee future results! We are all grownups here so we should already know we are each individually responsible for our own accounts, so if it doesn't work out, it's your own fault. Occasional I get PMs from newer members, asking me what to do with their accounts, so here's my answer. Find out what DCA is then do it for a long time. In the meantime read, read, read, then practice what you read, then figure out where you screwed up, then start the process all over again.
The majority of this data is based off the S&P 500's past prices, typically over the last 20 years. If this data does not come from the S&P 500, then I will state what index it is derived from, otherwise assume it is of the same source. While most of the data is computer generated, much of it is still done by hand and is therefore subject to the occasional human error. Past data does not guarantee future results! We are all grownups here so we should already know we are each individually responsible for our own accounts, so if it doesn't work out, it's your own fault. Occasional I get PMs from newer members, asking me what to do with their accounts, so here's my answer. Find out what DCA is then do it for a long time. In the meantime read, read, read, then practice what you read, then figure out where you screwed up, then start the process all over again.
