TSP Talk - Thrift Savings Plan Strategies

Market Comments

October 20, 2009

Current TSP Share Prices

Today's Commentary (Short Term Outlook)

Another week, the start of another rally

Stocks are at it again as the major indices picked up about 1% to start the week as the Dow added just shy of 100-points. The TSP stock funds were all up nicely with the I-fund leading the way at +1.6% after more weakness in the dollar. The F-fund was up 0.08%.

Trading volume was on the light side, which is a warning sign - but it's price that pays. And, without missing a beat, after the close yesterday, Apple Computers delivered a strong earnings report sending the stock market index futures up again. I saw RevShark mentioned yesterday that this is a potential setup for a sell-the-news reaction some time today.

The story in the S&P 500 remains the same - riding the overhead resistance. That's about all I have say about it today, but if you remember we mentioned last week that the EbbChart System had another green-green-green pattern for yesterday so I guess the big up day shouldn't have surprised me.

Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

We had that g-g-g pattern last Wednesday and Thursday as well and the S&P was up 1.8%and 0.4% respectively. Yesterday makes three in a row. It is a bullish pattern, but I expected at least one of them to be a down day, but no. Out of respect for the paying EbbChart System subscribers, I don't want to give too much more away, but I will say there is another green-green-green pattern coming up this Thursday. Can the S&P make it 4 for 4?

The Wall Street Sentiment Survey, considered the smart money, saw its most bearish sentiment reading in over six years last Friday. The 6% bulls to 82% bears, for a 0.07 to 1 bulls to bears ratio is quite bearish, and this sentiment survey is not considered a contrarian reading. In this one, bad means bad.

                 Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

We actually saw a 100% bearish reading (0% bulls) within the last year, but I don't see it on this chart anymore so it must have been a misprint - which is what I suspected at the time because I had never seen that before. So, the smart money is looking for some kind of correction, but as of yesterday, the smart money isn't looking so smart.

The dollar continues to tank and closed at it's lowest 52-week level yesterday. That is helping the price of oil move higher, which is now at its highest level in a year as well.

                 Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

With the breakout above that wedge and cup and handle-type formation, the upper resistance line should now act as support, which is not a good sign for gas and heating oil prices this winter. Hopefully the price increase is also an indication that demand is climbing, which would be a good sign for the economy, but anything that takes money out of the pockets of the consumers probably won't be a good thing.

That's all for today. Thanks for reading. We'll see you back here tomorrow!

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