TSP Talk - Thrift Savings Plan Strategies

The battle

For those of you who try to time the market playing the short term swings, this is as tough as it gets. Many of the shortest term indicators are sitting in the middle of neutral land.

The intermediate term indicators are getting bearish which is a negative for the market over the next month or so, but in another week or two we will be in one of the strongest seasonal periods of the year for stocks. It is going to be a tough battle.

Last year we were in a very similar situation in December. We were coming off of a big October/November rally and the market was very overbought. The S&P chopped around but still climbed higher through the end of the month before collapsing the first week in January.

Chart provided courtesy of www.decisionpoint.com

So will the seasonality win out over the intermediate term overbought condition we are facing, or will last year's action cause people to run for the exits earlier this year?

That's what will make the rest of this month interesting. As I mentioned, right now the short term indicators are very neutral. But we could see some decent trading opportunities if we wait for short term overbought or oversold conditions to present themselves. The uncertainty could provide a playable chop.

As far as waiting for a longer term signal, looks like that will take longer than I had been anticipating. The deteriorating psychology leg is telling me that the best buying opportunity could still be weeks away.

The large options traders are buying puts (bets against the market) at an even 1 to 1 ratio to calls (bets for a market rally). The small options traders are buying calls at well over a 5 to 2 ratio over puts. The smart money is once again putting up a defense while the smaller "dumb money" is as aggressive as they have ever been.

That's all for today. Currently 100% G fund. Thanks for reading.