No change.

Another 60 point gain turned into 20 for the Dow - yesterday's action was very similar to Monday's.  That is when the market dipped during the day, buyers stepped up, and when the market surged the sellers took over.

Making short term predictions is not something I like to do.  Well, let me rephrase that.  It is something I like to do, but it's not something I am very good at doing.  But of course when we have to put our money somewhere, we do have to make some sort of anticipatory decision on where that might be.

My money is still on the sidelines, if you want to call the F fund the sideline, and based on everything I am seeing in the indicators and the market's action I am anticipating action similar to what we saw in late March / early April and again in late September / early October of last year.  See points marked A below.


                                  Chart provided courtesy of www.decisionpoint.com

I had mentioned on Monday that there was a tendency for stocks to see higher prices 10 days after action which we saw last week (2.5 stocks rose for every one stock that was down on Thursday and on Friday 2.5 stocks were down for every one stock that was up) and at the same time the S&P was within 1% of new 52-week high.  But that rally also tends to lead to another push lower after those 10 days.

So I expect stocks to move sideways to higher for a bit longer, similar to what we are seeing.  If you want to try to play that be my guest.  But you can see in the above examples that once the rally does end, the pullback can be quick and deep.  Maybe too quickly to make an effective move in our TSP accounts.

The bonds are showing some signs of tiring.  With the Fed poised to raise rates again it is getting tougher to remain excited about the F fund from a fundamental standpoint.  There has been no breakdown, but any cracks in the technical picture for the bond fund and I will flee to the G fund.  The short term trend is on support now and it's getting close to do or die going forward.


                                  Chart provided courtesy of www.decisionpoint.com

And speaking of the Fed, we are less than a week away from another potential interest rate hike and a changing of the guard as Greenspan will retire Tuesday.  If there is going to any major move in the market, up or down, this meeting could be the stimuli.  Whether that move comes in anticipation of the meeting or as a result of what is said or done in the meeting, we don't know.  But I have a feeling we will see some fireworks next week.

That's all for today.  I am currently 100% F fund.  Thanks for reading. 

Administrative note:  RevShark's TSP Timing Newsletter will be launched this weekend.  TSP Timing is a weekly newsletter giving subscribers a target allocation determined by professional hedge fund manager James 'RevShark' DePorre.   Subscribers will navigate the financial seas along side the Rev while he manages millions of dollars for private investors.  Each week he will highlight TSP funds and a target allocation he believes will provide the best investment potential.  We will offer a 14 day free trial beginning this weekend.  Stay tuned for more details.