TSP Smart: Quicklook 20 January 2022

If you look at just the closing price, you will not see the damage. The TSP S fund was down about 3% in the last hour or so of trading today. It is technically a worse look to see a intraday reversal end at a new low.

I mentioned yesterday to members that we are seeing an effect from the Options Expiration on the 3rd Friday of each month. The market has tumbled into it for 6 of the last 8 months. So we are not expecting a bottom until Friday or Monday.

But this brings us to a larger issue. If the major indexes break trend before the bounce, then we could see the beginning of the real correction.

I know, I know the Nasdaq is already down over 10% and the small caps are getting slaughtered. But after last years surge of the Federal Reserve flooding of the financial markets, a real correction will wipe out ALL of those gains.

Stock speculators are doing worse in many cases. Peloton after surging over 500% on the Fed’s liquidity lost it all and ended back at its initial public offering price today. Netflix was down another 20% in afterhours at one point which will break it technically. Please do not try to catch falling knives.

Those who follow my recommendations exited in December and are watching wondering when to get back in. This is a much better position to be in than down 25% wondering what to do. I know everyone is telling them to hold. And that will be tragic in the long run.

In the short run, the smart investors are now selling the rallies. It is kind of hard to catch an intraday rally in mutual funds or TSP accounts.

I am currently watching where the OpsEx bottom ends up and what that does to the long term technical picture and sentiment. It is getting interesting again.

Invest Smart,

Michael Bond

TSP Smart & Vanguard Smart Investor

Categories: Perspectives