Today's Comments (Short Term Outlook)                             Printer friendly

Please Read!  Participants Choices of TSP Funds. Send them a fax!  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. ----------------------------------------------------------------- Mixed signals and seasonality The light volume holiday trading continued on Friday as the indices were mixed with bonds (F-fund) being the big winner.  Today is historically positive, although not over the last 15 years. It's the last trading day of the year and we had some interesting developments in 2007.  The I-fund will be the repeat winning fund for the year, but as of Friday, the F-fund is beating both the C-fund and the S-fund for the year.  I'd love to post some of the emails I have received over the last year and a half from people wanting me to have my head examined every time I suggested the F-fund.  The F-fund does have its moments, and any time you have an economic slowdown, that is usually the when the F-fund outperforms.  The last trading day of the year has been positive 60% of the time since 1950, but in the last 15 years, the S&P 500 closed in positive territory only 27% of the time, according to sentimentader.com.  I wish I had seen that stat last week as I am fully invested today because of the longer-term positive seasonal bias.  It should be another very low volume trading day and it could get volatile as money managers "window dress" their final 2007 portfolios for their annual reports. We still have the gaps open at 1430 and 1460, and I doubt the S&P will break through either of the converging pennant formations today.  Perhaps later in the week.                                     Chart provided courtesy of www.decisionpoint.com My instincts tell me to continue to be cautious, but my instinct are not very good at all.  If my instincts say we should be cautious, perhaps the rest of the dumb money feels the same way - yes, I consider myself the dumb money but I'm smart enough to know it.  Last week's TSP Talk Sentiment Survey saw 43% of respondents say they are bullish for this week, and 43% say they are bearish.  That 1 to 1 ratio keeps that system on a buy signal for this week.  Anything less than 1.26 to 1 is a buy signal. Confirming that reading, the AAII Investor Sentiment Survey came in with a very high bearish reading also, 50%.  The 0.60% bulls to bears ratio tells us the bearishness may be getting excessive and we should be looking for buying opportunities.                                     Chart provided courtesy of www.decisionpoint.com The problem is, the technical picture is so iffy that I hate to get too excited about jumping into stocks for any length of time.  I am still thinking we should sell strength until the chart starts to look better. I will be updating the longer-term commentary in the next few days but I did post a new allocation for that hypothetical inactive / buy and hold type account on that page. A quick note about the proposed TSP transfer limits.  I hope that you noticed that this proposal was originally announced during the quiet Thanksgiving week, when congress was out.  Now they put out the Federal Register Notice during the week between Christmas and New years.  They are sure trying to sneak this change in under the radar.  Don't let them do it.  Tell anyone who will listen.  Act now!  That's all for today.  Happy New Year everyone!  See you back here on Wednesday. Attention TSP Talkers.  Only a couple of 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. 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