Today's Comments (Short Term Outlook)                             Printer friendly

Fed Well, today is the day.  At 2:15 p.m. ET, the Fed will make their announcement on interest rates.  Stocks have rallied into this meeting so far.  Will we see a sell the news reaction, or can the rally continue? Typically, the market reacts very strongly to the initial announcement but any gains or losses are quickly reversed before a more consistent direction develops.  Of course there is nothing we can do about it once we hear the news.  Our trading deadline has come and gone by this point. Yesterday I talked about the obvious move being a sell the news reaction as we have seen so often in the past.  If the market had been moving down leading up to this point, we'd look for a buy the news reaction.  But I don't think it's going to be that easy.  We could see a dip after the announcement but I just have a feeling that the obvious move won't be so obvious.   Even if the market does sell off after the announcement and continues falling tomorrow, there is still in lot of cash on the sidelines that is looking for an opportunity to get in before the end of the year.  Because as we know, the last half of December is very strong historically. I was a little surprised to see the market act so well yesterday.  I would have expected more of a flat day, so you have to be impressed that the S&P 500 was able to cut through the resistance so easily.  Not surprisingly, volume was light as I suspect it will be this morning.                                       Chart provided courtesy of www.decisionpoint.com I am keeping a close eye on the OEX put/call ratio.  I would have been concerned if this indicator dropped sharply yesterday as an indication that the smart money was lightening up on stocks before the announcement.  But they didn't. As I write this on Monday night, I still have not made up my mind what I will do.  I will tell you that our systems are split for Wednesday, making it a tough decision.  I may just cut the allocation down the middle with something like 50% stocks, 50% G fund, just in case we do sell off. Griffin has a posted a new Griffin's Brief article for us this week.  Enjoy! That's all for today.  I'm sure we'll have a lot more to talk about tomorrow.  We also have a lot of economic data coming out later this week.  It should be an exciting week.  Thanks to all of you who signed the petition on TSPshareholder.org.  Your support is much appreciated. 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.