Market Comments October 27, 2008 TSP Fund share prices as of: 10/24/08 Fund - G Fund F Fund C Fund S Fund I Fund 12.6622 11.8831 10.0627 11.6048 12.6726 $  Change - 0.0013 -0.0951 -0.3627 -0.4014 -0.9361 % Chg day - +0.01% -0.79% -3.48% -3.34% -6.88% % Chg wk - +0.07% +0.79% -6.77% -9.88% -11.05% % Chg mon - +0.24% -1.22% -24.75% -30.13% -29.10% % Chg 2008 - +3.11% -0.39% -39.23% -41.36% -48.82%   L2040 L2030 L2020 L2010 L Income 11.7100 11.8931 12.1839 13.3649 12.4577 $  Change - -0.4502 -0.3976 -0.3428 -0.1880 -0.1134 % Chg day - -3.70% -3.23% -2.74% -1.39% -0.90% % Chg wk - -6.99% -6.09% -5.06% -2.46% -1.55% % Chg mon - -22.61% -19.94% -16.78% -8.57% -5.57% % Chg 2008 - -35.80% -31.69% -26.82% -13.55% -7.52%

Today's Comments (Short Term Outlook)                             Printer friendly

Now or never Volatility continued on Friday as the Dow dropped another 300-points, although it had been down over 500 at one point.  The bulls had an opportunity for a big reversal, but the sellers came back late in the day to keep stocks in negative territory.  The I-fund was pounded again dropping 6.9% on the day, while the S&P 500 lost 6.8% for the week.  The S&P 500 has been able to hold onto the October 10th low, but it is now in quite a precarious position.   Overhead resistance looms and only the October 10th low is keeping it from starting another leg down.  Some investors and traders are of the belief that the high volume (highest ever in fact) reversal we saw on October 10th will be enough to call it an intermediate-term bottom.                               Chart provided courtesy of www.decisionpoint.com We will soon find out.  If the S&P 500 is going to start an intermediate-term rally off of that capitulation-like reversal, it is now or never I'm afraid.  I'm not sure what the catalyst will be, but looking at the charts and indicators, it's time is now, but it is looking over the precipice, and this is not looking too good. If stocks have anything going for them over the next couple of weeks, it is the strong seasonality of late October / early November.  It is something to consider, but as I have said many times, seasonality should not be used as a primary indicator - Particularly in this market environment.                               Chart provided courtesy of www.sentimentrader.com I have mentioned bonds a couple of times over the last couple of weeks - saying the F-fund was a possible option when not in stocks.  The 30-year T-Bond has now rallied up to resistance and put in a nasty reversal down day on Friday.  It is still in an uptrend but I think I will take the F-fund off of that safe haven watch list for now because of that action.  The F-fund was having a good week last week, but Friday's reversal down wiped out half of the week's gains.                              Chart provided courtesy of www.decisionpoint.com We have a busy week on the economic data front with New Home sales today, Consumer Confidence tomorrow, the Fed meeting and possible rate cut on Wednesday, and the GDP on Thursday, to name a few.                                                          Source Briefing.com The dollar continues to rally, while gold, oil, and other commodities continue to struggle.  The NYSE is oversold again, and the AAII Sentiment Survey has bulls and bears tied at 39%.   So, sit back, buckle up, and enjoy the ride.  This one is a lot scarier than a rollercoaster because you know when a rollercoaster is about to go up or down.  You know that a rollercoaster ride eventually ends, and you know it will stop in about the same spot that it started.  This ride in the market can not guarantee us any of those things.  The market MUST hold here (stay above 840) or expect the downside to continue with a vengeance.  Be very careful out there! That's all for today.  Thanks for reading!  See you back here tomorrow.   Have questions?  Visit our message board for answers.  Would you like to be on our email alert list?  We will send you an email when there is a change to our asset allocation or market outlook.  Your email address will never be given out.  Read our privacy policy.  By signing up you agree to the TSP Talk Terms of Service.  More details below **. Are you bullish or bearish?  Join the Weekly Sentiment Survey. Like what you're reading?  Tell a Friend about us. ------------------------------------------------------------------------------------------------------------------- ** By joining our email alert list you will receive an email each time the premium service initiates an interfund transfer or we change our market outlook.  You may also opt for a daily reminder, or each Monday morning reminding you that our comments are updated daily.  We will always send out these emails prior to making the transfers but we can not guarantee you will receive it in time to make a transfer should you decide to follow the transfers in your own account.  There is always a possibility for a loss in your account so following any recommended actions is done so at your own risk.  These transfers could be last minute decisions and you may have to act quickly to make the deadline.  Please consider your investment strategy before taking any advice or making any transactions.  By reading the contents of TSP Talk.com and accepting the email alerts, you must agree to the Terms of Service.  Thank you. TSP Talk