Market Comments January 28, 2009 TSP Fund share prices as of: 01/27/09 Fund - G Fund F Fund C Fund S Fund I Fund 12.7612 12.5783 9.7839 11.4260 12.8296 $  Change - 0.0007 0.0509 0.1060 0.1290 0.2599 % Chg day - +0.01% +0.41% +1.10% +1.14% +2.07% % Chg wk - +0.02% +0.46% +1.66% +1.79% +3.89% % Chg mon - +0.16% -0.02% -6.23% -6.40% -10.00% % Chg 2009 - +0.16% -0.02% -6.23% -6.40% -10.00%   L2040 L2030 L2020 L2010 L Income 11.7471 11.9712 12.3061 13.5606 12.6202 $  Change - 0.1358 0.1213 0.1053 0.0576 0.0375 % Chg day - +1.17% +1.02% +0.86% +0.43% +0.30% % Chg wk - +1.94% +1.70% +1.44% +0.71% +0.49% % Chg mon - -5.94% -5.16% -4.30% -1.97% -1.28% % Chg 2009 - -5.94% -5.16% -4.30% -1.97% -1.28%

Today's Comments (Short Term Outlook)                             Printer  friendly

FOMC today / Strong seasonality It was another strong day for stocks yesterday as the C and S funds were up 1.1%, and the I-fund, with the help of a dip in the dollar, was up 2.1%. The S&P 500 is approaching the 20-day and 50-day moving averages, and the declining resistance line.  With the S&P 500 now up three days in a row, can the rally continue?  Perhaps.  Seasonality is quite strong this week, but rallies tend to fade after 2 or 3 days in a bear market.                      Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk In after hours trading, the futures shot up on the "Bad Bank" story.  But with the Fed meeting today, anything is possible.  With interest rates already basically at 0%, I'm not sure what the Fed can do to help or hurt at this point.  I guess we'll find out. A quick look at the AGG (bonds) shows a short-term rally is possible, although resistance is also overhead.  The 4-week pullback may be oversold enough to see some upside.                     Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk I have been dwelling somewhat on the strong end of January seasonality as I have been looking for opportunities to pick up some gains where I can.  I missed the Santa Claus rally and have regretting not taking action. Some may have interpreted yesterday's commentary as me becoming bullish, but that is not the case at all.  I just want to take some calculated risks in an attempt to pick up gains during this bear market as sitting in the G-fund all year is not going to pay the bills, so to speak.  So, I have been watching for situations that may provide high odds set ups - but of course there is always risk being long (in stocks) during a bear market. Taking a look at the last 10 years' returns during the final three trading days of January, and the 1st three in February, we can see a pretty good pattern.  The last two trading days in January (marked "last" and "last -1" (that's last minus 1) below) have been up 7 of the last 10 years, and the 1st trading day in February has been up 8 of the last 10.  Then things drop off significantly.                              Adding up the 10-years of returns shows us that the last two trading days in January plus the 1st trading day in February were up 8 of those 10 years with an average return of +1.21%.  Not too bad compared to a random 3-day period. The Fed could throw a wrench in this of course, and as I mentioned, the S&P has been up three days in a row already, so be careful.  There are no guarantees.  I have also learned that once I recognize a pattern, it tends to end.  We'll see.  I'd say if you can pick up a gain in the coming days, put it in the bank quickly and get back to safety.  I want to mention quickly that Thursday of this week, according the daily EbbCharts, shows signs of some trouble for stocks.  I mention this since it goes against the seasonality data - so again, please be careful. That's all for today.  Thanks for reading.  See you tomorrow!