Market Comments November 5, 2008 TSP Fund share prices as of: 11/04/08 Fund - G Fund F Fund C Fund S Fund I Fund 12.6762 11.9037 11.5469 13.4233 15.1468 $  Change - 0.0013 0.1163 0.4520 0.2949 0.9696 % Chg day - +0.01% +0.99% +4.07% +2.25% +6.84% % Chg wk - +0.04% +1.39% +3.82% +2.30% +6.70% % Chg mon - +0.04% +1.39% +3.82% +2.30% +6.70% % Chg 2008 - +3.23% -0.22% -30.27% -32.17% -38.83%   L2040 L2030 L2020 L2010 L Income 13.2724 13.2807 13.3756 14.0267 12.8627 $  Change - 0.4816 0.4249 0.3672 0.2018 0.1229 % Chg day - +3.77% +3.31% +2.82% +1.46% +0.96% % Chg wk - +3.68% +3.23% +2.77% +1.45% +0.98% % Chg mon - +3.68% +3.23% +2.77% +1.45% +0.98% % Chg 2008 - -27.23% -23.72% -19.67% -9.27% -4.51%

Today's Comments (Short Term Outlook)                             Printer friendly

It's over! The election is finally over and the market's rally yesterday almost seemed like a sigh of relief.  The uncertainty is now certain.  Whether the new administration's policies will help or hurt the economy and market is unknown, but at least we finally have some clarity.  That said, the Obama win was likely priced in already and we we could see a "sell the news" reaction by the end of the week. The S&P 500's 4% rally was impressive, but it is now pushing the limits of the recent trading range and pressing against that overhead resistance area that we have been watching.  If it can manage to move higher, the 50-day moving average will be its next troublesome area.                              Chart provided courtesy of www.decisionpoint.com The head and shoulders pattern (H&S) which gave us such a nice roadmap to the potential weakness that market was facing this year, reached its downside target of 1000-1005 in early October.  But the selloff did not stop there as we saw lows near 840.  When the 1000-1005 area was broken, that then became a resistance area.  Except for a quick intraday rally on Tuesday, October 14, the S&P has not made it back above that level, and there have been no closes above 1005. The dollar pulled back about 2%, helping the I-fund to its nearly 7% rally yesterday, and a 10% jump in the price of a barrel of oil.  But with the European countries on the verge of cutting interest rates, I am anticipating the rally in the dollar to continue in the coming days and weeks. We talked before about the 9-month cycle and we have now completely the end of the recent cycle, and are starting a new one.  The bear market of 2000-2002 put in an initial bottom at the end of a 9-month cycle as well, and made a final test at the end of the following 9-month cycle - with another test in between.                                       Chart provided courtesy of www.decisionpoint.com We could be looking at a similar scenario this time around, although I don't want to call this the bottom, but rather I would expect at least one test of the low made on October 10th, at some point in the next several weeks.  Whether it holds we don't know yet.  There is still a lot of work to be done to get this economy on the mend. As you might imagine, the NYSE overbought / oversold indicator jumped to an even more overbought level after yesterday's rally.  The market is overbought and at resistance.  That makes the rest of the week quite interesting.  I would be impressed if stocks can continue higher, but I'm not ready to gamble on it yet. That's all for today.  Thanks for reading!  See you tomorrow!