I am 100% in the G Fund.
There is significant risk of a drop ahead in the S&P 500 Index. From a technical basis, there is astounding triple negative divergence between price action and the MACD Histogram. Resistance on a closing basis sits @ 1316. Gann resistance lies @ 1313. Elliott Wave resistance lies @ 1311. Resistance on the daily 50-day moving average sits @ 1316. Resistance on the weekly 13-day moving average sits at 1316. The dominant trend is down and yet the market is approaching an overbought condition on low volume. These factors suggest an excellent shorting opportunity. Since our objective is to remain in the C Fund while the market is going up, the future seems inconsistent with our objective.
On the fundamental level, there are ample reasons for the market to sell off. There is the continuing risk of a Greek default. Who knows the connection between a Greek default and the threat of contagion in French and British banks? We have the continuing risk of bad news on the federal debt ceiling vote. There is too much sovereign debt out there in Europe. And, most importantly, investors and traders sell bad news in a Bear Market.
For these reasons, it is prudent to leave the C Fund at this time.
Your early morning strategist,
Wink
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