Today's Comments (Short Term Outlook)                             Printer friendly

Cooling off The market did well recovering from early losses yesterday as it tried to find some footing after Tuesday and Wednesday's extreme volatility.  The fact that the S&P 500 managed to stay above Wednesday's low is a good sign, but there is still downward resistance above and it is right in the middle of the two.  I'll be watching the 1469 area on the downside, and 1510 on the upside today for clues to the direction of the next bigger move.                                       Chart provided courtesy of www.decisionpoint.com Regardless of what the Fed did, the market will correct overreactions, which is the basis for the overbought/oversold indicators.  News will bring with it swings and the bigger the news and the more unexpected it is, the more the market will react.  It then takes a little time for the market to digest the information.  Yesterday's PPI report was part of the reason for the early selling as the numbers came in on the high side (inflationary-wise) and today's CPI will have even more of an impact.  The market will react, then try to figure out what that really means for the economy and corporate profits.  It's tough to guess the outcomes of economic reports or news before it comes out, but we can look to the charts and indicators for clues.  One of our more powerful indicators we have is the use of investor's sentiment.  Our Sentiment Survey system did an about face this week.  After last week's 4 to 1 bulls to bears ratio, giving us a sell signal for this week (S&P is down 1% thru Thursday), the system moves to a buy signal for next week as the ratio moved closer to 1 to 1.                     The votes were down this week as I posted the survey later than usual on Thursday, but that shouldn't invalidate the data.  Anything over 100 votes is plenty for this type of survey.  The system  is up just over 20% for 2007. The AAII Investor Sentiment Survey came it at 48% bullish, 36% bearish for a neutral 1.33 to 1 ratio.  The www.tspshareholder.org website has obtained 1600 signatures on their petition so far.  Please sign it, and encourage your co-workers to do so as well, to help us have more say in what happens with our TSP.  Look for an upcoming article in the Washington Post regarding the trading limitations being proposed.  The creator of TSPsharholder.org was recently interviewed by one of their journalists. That's all for today.  Have a great weekend!.   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.