Upon the Seasonal Sell Window

By Sr Editor on 04-27

We will be watching the MACD indicator for the TSP C and S Fund over the next few days. The MACD has remained on a sell but was close to turning to a buy on the last rally. Friday’s loss turned the signal away from the buy crossover. Monday and Tuesday’s action will point to whether we exit when the window opens in early May. It can go either way at this point. Part of me would like to get the sell, start enjoying my summer, and let the market deal with the fallout of tapering QE and the Russian-Ukrainian situation this summer. But you never know, there might be one last rally left. While I would be surprised if a new high was set at this point, I would not be surprised by a right shoulder developing prior to a bear market or major correction. TSP Smart Investor member’s (AlmanacSmart.com) will get an alert e-mail at least a day prior to the re-allocation date.

Wilshire 5000 index

The current charts provide a mixed picture. The Wilshire 5000 index (whole US market) remains above the short-term trend line, but the MAC D is on a sell as we approach the seasonal well window. The Russell 2000 index has decisively broken the short-term trend line and also remains on a MACD sell signal as we approach the seasonal sell window. My view is we will get one last rally, maybe the turn-of-the-month or maybe longer, but the market we remain weak and the process will begin for the typical mid-term summer correction. The question to be answered in the next few days is will the market turn up in time for a buy signal that maintains our position in equity funds or will it come too late and we liquid our equity positions during the turn-of-the-month bump.