TSP Fund share prices as of: 01/02/09
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Today's Comments (Short Term Outlook)
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Will the real market please
stand up Investors and traders took full advantage of the historically strong seasonality and light volume pattern of the holiday trading over the past two weeks. This week, reality kicks in and we should get a better idea if this recent rally is for real. The S&P 500 produced a breakout to a higher high, which is something we like to see, but with volume at about half of a normal trading day, it is very tough to trust the action. It has now given us a one day close above the downtrend line and the 50-day moving average. A strong market will close above those levels for at least two to three days. We'll see how that goes.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk I used the MACD histogram indicator above to show a recent divergence. You can see that the MACD is not making a higher high, despite the higher in the S&P 500. Perhaps it is the volume that is lacking and the MACD will make a move this week, but for now we should look at this with caution. The big question for 2009 is whether all of the bad news has been factored into the market's weakness in 2008. If there is another series of poor economic reports, bankruptcies, bailouts, business failures, credit woes, and has it already been discounted into the market, or will this pull the plug on a rally? We don't know for sure of course, so let's keep an eye on the charts and indicators, which right now are quite overbought and sentiment is overly bullish. So again, caution is warranted. The new TSP Talk Sentiment Survey System is on a sell signal to start the year because of the overly bullish reading. See the sentiment system page for more info. Only 3 days left! A lot of folks have been on vacation and may have missed our post-holiday sale announcement. I have been pleasantly surprised at the response we received last week. It's nice to know that many of you appreciate what the Premium Services accomplished last year. I'll go over that below. We are offering a post-holiday special discount of 20% on the annual subscription prices to help out our 2009 returns.  The premium Services all did relatively well, despite negative returns.  The Ebbchart got off to an awful start in 2008 dropping nearly 8% in January '08 alone. It was down 30% at one point in October, but a strong plus 16% finish in November and December brought the yearly return to a loss of 17.5%. That is less than half of the losses of the TSP stock fund. It seems to be back on track. After the 20% gain in 2007, that is a two year return of -1%, well over 30% better than the TSP stock funds. This is our most active and aggressive service. RevShark's TSP Timing took a defensive stance early last year, deflecting the market losses during the first half of the year, but Rev made a couple attempts to buy the dips that didn't pay off, but the service ended the year down just 10.2%. That gives RevShark a two year return of -5.4%. Not too bad considering the market carnage. Trader Fred's completely computerized system was able to come out of 2008 with just a 2% loss. The two year return of +3.5% is quite impressive. I have always been a big fan of using computerized buy and sell signals as there is no human emotion to get in the way. My emotions are what usually get me in trouble when I try to make a decision. I understand that two years is a small sampling of market data, but I would call the last two years a big success for the premium services over the traditional strategy of buy and hold that is push on us from "the experts". So, will the market turn up or continue the bear market in 2009? Hopefully our premium services will be able to tell us find out. If you have been been considering subscribing to one of our premium services, now is the time to act. The sale prices end after January 7. Click here for more info, or click here to get started and enjoy immediate access. If you already subscribe to a month to month service and would like to convert to the annual to take advantage of the discount, send me an Email and I will help with the conversion. If you are already an annual subscriber and would like to take add a year to your service with the discounted price, also Email me so we can handle that for you. That's all for today. Thanks for reading! We'll see you back here tomorrow. |