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Today's Commentary (Short Term Outlook)
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Waiting
Stocks were
mixed again yesterday as the Dow was up another 46-points, but most of
the indices ended flat to modestly lower. There was speculation
that the Fed will raise their discount rate as the economy strengthens without
rising inflation.
Other than the G-fund, all of the TSP funds closed lower. The C-fund
slipped 0.03%, the
S-fund fell 0.46%, and the I-fund lost 0.88%. Bonds also closed
lower dropping 0.10%.
The S&P 500
had kind of a meaningless inside day as
yesterday's high was lower than Wednesday's high, and the low was higher
than Wednesday's low. Volume was light, but the breakout is still
holding making for a nice bullish picture, although still quite
overbought. A pullback to the 20 or 50-day EMA would be greatly
welcomed as support gets further and further below the index, although
the 1150 breakout area could act as support as well.
Chart provided courtesy of
www.decisionpoint.com,
analysis by TSP Talk
The Dow Jones finally followed the leaders and broke out yesterday.
The Dow and the S&P 500 are the followers and so far they have both
followed the leaders (Nasdaq and Dow Transports) very well.
Chart provided courtesy of
www.decisionpoint.com,
analysis by TSP Talk
The
Rydex Asset ratio tells us how much money investors are putting in
mutual funds that are bullish, bearish, or just in cash (money market).
Right now the bear fund assets plus the money market assets, divided by
the money going into bullish funds is at a 0.50 to 1 ratio. That
means for each dollar going into a bull fund, only 0.50 cents is going
into a bear fund and / or money market.
Chart provided courtesy of
www.decisionpoint.com,
analysis by TSP Talk
That 0.50 to 1 ratio has led to some short and longer-term market peaks
in the past, with the most recent being in mid-January, just before the
correction.
I am in the same position as I've been in for a couple of weeks.
I'm waiting for a pullback or correction so I can put some money back
into the stock funds. Right now, things are just too extended to
the upside to join the fun.
Thanks for reading. We'll see you
back here tomorrow.
Tom Crowley
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Friday is the 15th trading day
in March: 
Chart provided courtesy of www.sentimentrader.com
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