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Fund share prices as of: 11/08/07
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Today's Comments (Short Term Outlook)
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Possible reversal, for
now... The market made a very nice recovery late yesterday after struggling all day. The last hour of trading saw nearly all of the earlier 200+ point loss for the Dow disintegrate.  The Nasdaq was hit hard being down nearly 2% on the day, but the small caps (S-fund) and international stocks (I-fund) actually managed to close with moderate gains. It's too early to say, but we could have the start of another kangaroo tail type reversal. Volume was very high during the reversal day, and that is a good indication, but if the indices head right back down, as we saw during a mini-kangaroo tail in October, all bets are off.  Chart provided courtesy of www.decisionpoint.com Regardless, this prospective reversal is not any kind of long-term buy signal...yet. The S&P is still in a downtrend and there is a lot of room for this market to run to the upside without leaving this current downtrend. As long as we are still in this downtrend you have to remain on your toes. We could see some decent rallies, but there is a good chance they will be sold. So, enjoy any upside but don't get too comfortable yet. That's a short-term outlook. You can see these kangaroo tails better on the candlestick chart below. This AAII Investor Sentiment Survey shows that the bearish percentage is now over 50%: The highest it's been since April. That is typically enough pessimism to spark a little rally.  Chart provided courtesy of www.decisionpoint.com The TSP Talk Sentiment Survey came in at 33% bulls, 52% bears for a 0.63 to 1 bulls to bears ratio. That keeps the system on a buy signal and 100% S-fund for next week. As a matter of fact, that is the lowest ratio since mid-September of 2006. The market made a heck of a run for nearly six months after that. The headlines have been ugly but remember that the stock market is a forward looking indicator. The bottom of this year's correction was made in August - assuming that holds. The market is likely to rally (eventually) well before the news of an economic recovery is seen in the reports and earnings. In other words, if you wait until the headlines are all good news before you buy, you will have probably already missed much of the rally. So we are looking at three different time frames. The short-term could see an oversold rally. The intermediate-term is now in a downtrend until it proves otherwise. And looking out over the next six to twelve months, I believe we will look at this as another decent buying opportunity. That's all for today. Enjoy your long holiday weekend. Take some time this weekend to thank the people that have made this great nation possible. Thank you veterans! We know freedom is not free. Have questions? Visit our message board for answers.
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