Today's Comments (Short Term Outlook)                             Printer friendly

Looking for the rebound, but ... Stocks have been exhausted to the downside and we know a rebound should be in our near future.  But from what level? Yesterday's action saw a break below November's low before a rebound brought the S&P 500 back into positive territory.  This is nothing to get too excited about and until proven otherwise, is just an oversold rally.  Notice below that the index closed just below the long-term support.  Support, once broken, tends to act as resistance.                                      Chart provided courtesy of www.decisionpoint.com  So, I'm not saying we will rally right here, right now, although that is possible.  I'm saying we will get a relief rally, but it's possible that we don't see the rebound until the S&P moves down to the 1375 area, or worse - ala August's bottom.  Any rally would be looking at stiff resistance near 1470, and some near 1435 (December's low). For those concerned about making too many transfers, now is the time to remain cautious, even if you do miss a rally.  Our systems have been making the adjustments also, showing the original signals for those who use the information to trade funds or ETF's such as the SPY (C fund), AGG (F fund), EFA (I fund), VXF (S fund), etc., outside of the TSP, but also less active recommendations for the TSP funds.  They are looking for weekly and monthly buy and sell points in the case of the TSP funds. Here's a sample of something you may see from the new approach of the Ebbchart System: Spinchart (horizontal view) Day:  C, S, I Ebbtracker Active System Allocation Recommended TSP Allocation* Monday  - =  100%  I-Fund x 50% S, 50% I Fund Tuesday  - =  100%  G-Fund 100% G Fund Wednesday  - =  100%  I-Fund 100% G Fund Thursday  - =  100%  G-Fund x 100% G Fund Trader Fred is doing something similar.  He had created a supplemental daily, weekly, and monthly model for the funds, along with a new F fund (AGG) system.  This info can be very beneficial to those who trade outside of the TSP, in addition to his slightly adjusted original TSP trading system.  Here is a sample of the Trader Fred supplemental data: Monday Morning Action for January 7, 2008: Daily Trader Weekly Trader Monthly Trader Bond Trader Stay in the F Fund Sell the C Fund Buy the F Fund Sell Alloc. #1 Buy the F Fund Stay in the F Fund TSP Trader COB Signal Summary: TSP   * Buy in COB Signal ** Date of Effective   Buy in Stop 2008   Model Signal Fund Date Transfer Date   Price Price Percentage   Daily Hold FFund Yesterday Today Tomorrow   N/A N/A 0.25%   Weekly Sell CFund N/A N/A N/A   N/A N/A 0.00%   Weekly Buy FFund 1/4/08 1/7/08 1/8/08   TBD TBD 0.00%   Monthly Sell Alloc.#1 N/A N/A N/A   N/A N/A 0.00%   Monthly Buy FFund 1/4/08 1/7/08 1/8/08   TBD TBD 0.00%   Bond Hold FFund 01/02/08 01/03/08 01/04/08   $12.01 $11.09 0.00%   N/A = No signals given     * Alloc. #1 is 50% in the C Fund, 25% in the S Fund & 25% inthe I Fund     * Alloc. #2 is 25% in the C Fund, 50% in the S Fund & 25% inthe I Fund     * Alloc. #3 is 25% in the C Fund, 25% in the S Fund & 50% inthe I Fund     ** Transfer uses this COB date's share prices     As we saw with the Sentiment Survey System over the last two years, we don't really have to be overly active to be successful.  The +21% and +28% returns in 2007 and 2006 respectively, were both done making only 16 transfers all year. So, expect changes here, but we feel we will still be able to provide a service that will handily outperform the buy and hold investors in the long run.  Don't let the TSP take away your edge.  Remember:  As our T-shirts say - Friends don't let friends buy and hold.                            That's all for today.   See you tomorrow. 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. Like what you're reading?  Tell a Friend about us.