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 have tried to identify two general patterns in the S&P500. Pattern 1 (The Rise, a gentle slow up and down ratcheting Rise over 3-5 months) and move into the C fund when the S&P500 is likely to go up significantly.
Then, Pattern 2 (The Drop, a 1-3 month more volatile drop 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) initiates Pattern 1 (The Rise). This 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. (You set the SMI indicator in your settings on Yahoo S&P500 charts settings). Pattern 1 (The Rise) typically starts by shooting up through the 20DMA (red line) up to the upper Bollinger Band (blue line). It the pulls away from the BB and is sustained period of up/down but generally UP increase in the S&P500 (C fund). 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 (when to move into the G fund) initiates Pattern 2 (The Drop) is less clear, but it is not that hard to understand.
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 clear drops over 3-5 business days. 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. There is no chart setting for Pattern 2 (The Drop), you recognize it from the 3-5 day decrease in the S&P500. It is best to visualize this in Candle mode.
Back to Home
what-i-do-with -my-tsp.blog 