Market Comments November 6, 2008 TSP Fund share prices as of: 11/05/08 Fund - G Fund F Fund C Fund S Fund I Fund 12.6775 11.9593 10.9457 12.7443 14.5174 $  Change - 0.0013 0.0556 -0.6012 -0.6790 -0.6294 % Chg day - +0.01% +0.47% -5.21% -5.06% -4.16% % Chg wk - +0.05% +1.86% -1.59% -2.88% +2.27% % Chg mon - +0.05% +1.86% -1.59% -2.88% +2.27% % Chg 2008 - +3.24% +0.25% -33.90% -35.60% -41.37%   L2040 L2030 L2020 L2010 L Income 12.7501 12.8215 12.9891 13.8225 12.7407 $  Change - -0.5223 -0.4592 -0.3865 -0.2042 -0.1220 % Chg day - -3.94% -3.46% -2.89% -1.46% -0.95% % Chg wk - -0.40% -0.34% -0.20% -0.02% +0.02% % Chg mon - -0.40% -0.34% -0.20% -0.02% +0.02% % Chg 2008 - -30.10% -26.36% -21.99% -10.59% -5.41%

Today's Comments (Short Term Outlook)                             Printer friendly

Sell the news Stocks pulled back hard yesterday, giving back all of the Election Day gains, and then some.  It's difficult to say what it was from a fundamental standpoint, but using technical analysis, we pretty much saw it coming.  (See yesterday's commentary for more.) Whether it was a "sell the news" post-election reaction to the pre-election rally, or whether it was the fact that the market is not too excited about Barack Obama winning, we don't know, and we don't really care.  We'll just keep looking at the charts and indicators for clues. The S&P 500 dropped over 5% after hitting resistance and, as we have said many times, it is a good strategy to sell rallies in a bear market, particularly when the indicators become overbought.                              Chart provided courtesy of www.decisionpoint.com The problem with the above chart is that support is so far below the current level.  Unless it consolidates here pretty quickly, the S&P 500 is likely to test the 840 in the near future.  If it does find its footing and can rebound higher, the 1005 area remains resistance, as does the 50-day moving average, 1044, and then the 1106 area.  The NYSE is indeed overbought and the indicator is now heading down again.  In a bull market, stocks can remain strong at overbought levels, but not in a bear market.  In a bear market, stocks can remain weak when oversold, whereas that it is a good buying opportunity in a bull market.                                      Chart provided courtesy of www.decisionpoint.com In October, the VIX hit levels not seen in a long time, if ever.  It had backed off from a reading near 90 a couple of weeks ago to the mid-40's on Tuesday (which is also high) but it has now bounced off of the lower Bollinger Band and is back in the mid-50's.  This tells us that volatility is probably here to stay for a while longer.                                      Chart provided courtesy of www.decisionpoint.com I hope the Ebbchart subscribers were able to take advantage of the system's recent signals.  It was a great move but I missed out myself.  My timing has been off lately as I got in for a late October rally, but made my transfer a day too early, then moved out again too early.  I felt some pressure with the TSP limits but that's no excuse.  The late October and early November seasonality charts told us it was a good time historically to be invested.  I really didn't want to be exposed to stocks for too long, but it turned out to be a decent one week rally. Looking below, the November seasonality chart seems to have a couple of days post-Election lull before rebounding again, but remember, this is a bear market and the action is certainly not typical. We have the jobs report on tap for Friday morning.  Consensus estimates are for a loss of 200,000 jobs, and an unemployment rate of 6.3%.  That's all for today.  Thanks for reading!  See you tomorrow!