Today's Comments (Short Term Outlook)                             Printer friendly

Please Read!  Participants Choices of TSP Funds.  Their Fax number is (202) 942-1676.  You can use www.faxzero.com. It's free.  If you wish, you can use this well written letter as a template, or others like it posted in that forum (use that link).  Is your union aware of this?  Let them know how you feel too!  Please act now before it's too late!  More info from www.tspshareholder.org. ----------------------------------------------------------------- Overbought and resistance prevails The news was bad yesterday with the assignation of Pakistan opposition leader Benazir Bhutto plus the release of weak economic data.  But is the news dictating the market, or is it the other way around? We have been watching the battle between the strong seasonality and the weak technical picture and while seasonality took the first few rounds, the overbought condition and overhead resistance prevailed yesterday.  We still have a couple of gaps to fill on the downside, only one of which remains within the pennant formation that continues to hold.                                     Chart provided courtesy of www.decisionpoint.com The next two days continue in the strong seasonal bias period and the NYSE is now closer to neutral than oversold.  That could make for a little rally but with volume still very light the indices could be jerked around by any big players in the market throwing money around. I had a feeling that financials could see some weakness in the last week because fund managers don't really want to show a lot of poor performing financial companies in their 2007 annual reports.  But they may do a little bargain hunting in early January to get them back in their portfolios - just a guess. You can see below that the first few days in January, particularly trading day #2 for some reason, has a very positive seasonal bias.  Then it gets a little dicey.                                Chart provided courtesy of www.sentimentrader.com This week's TSP Talk Sentiment Survey looked a lot like the prior two weeks'.  We saw 43% of respondents say they are bullish for next week, and 43% say they are bearish.  That 1 to 1 ratio keeps that system on a buy signal for all of next week.  Coincidentally, Wednesday, Thursday and Friday of next week will be trading days 1 through 3 in January, so seasonality will be on the survey system's side.                           You may have noticed that the I-fund actually ended the day in positive territory yesterday in spite of the big sell-off in U.S. stocks.  One reason was because the dollar moved down sharply again, breaking the chart through the down side of the recent pennant formation.  The weak economic data released yesterday had something to do with that and it keeps the door open to the I-fund for now.  Unless things turn around rather quickly, we could see at least a test of the prior lows in the dollar.                                         Chart provided courtesy of www.decisionpoint.com Bottom line:  I can see the market attempt a small rally in the next day or two, but I don't like the technical picture at all.  I would be a seller into any strength until the S&P 500 can prove it can make a move above the pennant formation.  The risks are still high, as is volatility, during this holiday trading, and perhaps into early 2008. That's all for today.  We'll see you back here tomorrow. Attention TSP Talkers.  Only a couple of more days left:  If you are not currently on the 2007 Automated Tracker and wish to be added to the 2008 Automated Tracker to have your returns tracked beginning January 1st, please read this page for instructions on how to be added.  That also goes for anyone who has not moved from the old tracking system to the new Automated Tracker. There are some requirements and restrictions, so please read carefully.  One of those restrictions is that you have to be a participating member of our message board.  Those already on the 2007 automated tracker will automatically be moved to the 2008 version. Contact EW_ret on the message board by Private Message (PM) to request access and include your email address. This allows the tracker to send you a password to login. Again, certain rules apply. For quick access, there is a link to the Automated Tracker Software on the TSP Talk Home Page, under the TSP Talk Features area.   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.