Market Comments November 12, 2008 TSP Fund share prices as of: 11/10/08 Fund - G Fund F Fund C Fund S Fund I Fund 12.6841 11.9570 10.5686 12.1443 14.0564 $  Change - 0.0040 0.0347 -0.1345 -0.3013 -0.1511 % Chg day - +0.03% +0.29% -1.26% -2.42% -1.06% % Chg wk - +0.03% +0.29% -1.26% -2.42% -1.06% % Chg mon - +0.10% +1.84% -4.98% -7.45% -0.98% % Chg 2008 - +3.29% +0.23% -36.18% -38.63% -43.23%   L2040 L2030 L2020 L2010 L Income 12.3748 12.4930 12.7155 13.6808 12.6574 $  Change - -0.1443 -0.1264 -0.1043 -0.0528 -0.0300 % Chg day - -1.15% -1.00% -0.81% -0.38% -0.24% % Chg wk - -1.15% -1.00% -0.81% -0.38% -0.24% % Chg mon - -3.33% -2.89% -2.31% -1.05% -0.64% % Chg 2008 - -32.16% -28.24% -23.63% -11.51% -6.03%

Today's Comments (Short Term Outlook)                             Printer friendly

Reading the tea leaves This week has started off on a sour note as the two-day loss for the S&P 500 is 3.4%.  We are seeing some classic action in the charts and that's good because it helps us read the tea leaves, but unfortunately the prediction looks negative - although there is a slight opening for a rally. On Monday morning, stocks gapped open sharply higher but the rally faded as quickly as it started, the S&P filled the gap, and eventually closed down about 1.3%.  On Tuesday stocks opened sharply lower and continued down most of the morning.  In the early afternoon, stocks began to rally - nearly filling the opening gap, then resumed the downward slide.  This is classic bear market action.   Taking a look at the bigger picture, the S&P 500 formed another wedge pattern but broke to the downside.  As we've talked about before, sometimes these wedges break in the opposite direction of the eventual move, but not always.  If this downside break takes us below the 840-850 area, based on the technical analysis of a wedge pattern, we can comfortably make a downside target of somewhere between 755 and 800.  If, however, the 840 level can hold, we can expect a move back up to the 980 level, and then the 50-day moving average, which is currently at 1038, but falling fast.                                   Chart provided courtesy of www.decisionpoint.com Although that rally is possible, we are in a bear market and I am anticipating the worst case scenario.  If we do hit that 750 area I will start thinking about buying, although the declining support line is actually closer to 700 and that is a possibility as well.   We didn't get closing share prices for the TSP funds yesterday because of the holiday, but the I-Fund was dealt another blow as the dollar was up another 1% yesterday.  Who knows how long this rally in the dollar will last, but for now it is in a screaming bull market and the I-fund is going to be the victim until that changes. Oil closed below $60 a barrel for the first time since March of 2007.  The strength in the dollar has a lot to do with this, so if the rally in the dollar continues, we could see this decline in oil continue.  Some say global demand should keep it above $50, but just as speculators took it up near $150 just a few short months ago, they could keep the downside momentum going longer than we'd expect.  This drop in oil is helping the consumer as it acts much like a big old tax cut.  Perhaps it will spark the U.S. economy with a healthy holiday spending spree. That's all for today.  Thanks for reading!  See you tomorrow. Administrative Note: Markie Harwood from federaltimes.com is writing an article wanting to delve into questions federal employees might have about their TSP investments and retirement planning in light of the stock market downturn.  What is the status of your planning now, and what questions would you like to have answered by a financial adviser? She has found her CSRS participants for the article but is still looking for an employee on the FERS retirement system who would like to be interviewed for the article. If you are willing to be interviewed for an upcoming story, please e-mail her at mharwood@federaltimes.com.  You would have to reveal some financial information, but in return the individual will have their retirement plan reviewed by a financial planner and be given specific advice / tips.