Overview
The TSP C fund is an exact match to an S&P500 index fund. I use the terms C fund and S&P500 interchangeably. I visualize the S&P500 index through Yahoo finance charts. The TSP C fund follows the movement of this chart exactly. I will show you how to set up the chart appearance and indicators on your web browser.
I try to identify two general patterns in the S&P500 and move into the C fund when the S&P500 is likely to go up significantly and move into the G fund when the S&P500 is likely to go down significantly. These signals are not perfect. These inflection points generally occur over a period of months, but you should keep an eye on it every day. Do not be too concerned about the daily up and down ratcheting of the index. The patterns I look for occur over months. I am not going to tell you when these happen, I am going to show you how you can identify when they happen.
These are the two main things to understand:
The Buy signal (when to move into the C fund) is when the Stochastic Momentum indicator (SMI) green line has reached a bottom and has just turned up. This is followed soon after by the green line crossing the yellow line going up. This signal is usually quite clear. . Here are examples of the Buy Signal.
The Sell Signal (when to move into the G fund) is less clear, but it is not that hard to understand. A sustained period of increase in the S&P500 (C fund) in pattern 1 will generally occur above the 20DMA. This often occurs over a number of months. This increase is stronger in the early weeks of the increase, then it begins to soften. The daily activity will sometimes drop below the 20DMA a bit. I call this a test of the 20DMA. The Sell Signal is what I call a Punch Through of the 20DMA. Typically this is a sharp downward drop through the 20DMA, often followed by multiple days of clear drops. This multiple day drop test helps avoid getting out too early, before a true bottoming out and a BUY signal… Here are examples of the SELL Signal.
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