Today's Comments (Short Term Outlook)                             Printer friendly

A rally is hiding in the bear After one the best weeks the market has experienced in five years, the indices gave back virtually all of those gains last week.  This is one reason why it can be so painful to try to pick a bottom, and why we are looking to the charts to give us good entry points - with support  to use as an exit if penetrated - if we get in too early. The market looks to be moving closer to a retest of the January lows, which may or may not hold, but a test is probably imminent as we talked about on February 1st.                                      Chart provided courtesy of www.decisionpoint.com  Even though a test may be in our near future, it doesn't mean the bear market will be over, but it could be the beginning of a meaningful rally.  I have talked about this before; if you take a look at the bear market of 2000-2002, you can see that the trend was obviously down, but there were periods of major rallies that lasted several weeks to months.  So, while we may (or may not) be in a bear market, we can try to catch some upside action in our TSP accounts.                                                           Chart provided courtesy of www.decisionpoint.com  Of course we don't know exactly if/when these rallies will start or stop, so I don't want to make it sound like it will be an easy thing to do.  I am saying that even if you believe we are in a longer-term bear market, you don't have to sit in the G-fund the whole time.  That is the safe thing to do, but those 20% plus rallies are enticing.  If you look at the duration of those rallies, you can see that you can still take advantage of them even if you are staying within the 2 to 3 interfund transfers per month. I'll be watching the short-term indicators for a good time to consider getting into the stock funds.  It may not be too long of a wait.  The more south and oversold we get from here, the better for those looking to get in. As we suspected on Friday, the dollar did back off from the overhead resistance, and the AGG (bond ETF) did rebound off of the 50-day moving average.  That keeps the F-fund in play. The TSP Talk Sentiment Survey System will remain in the S-fund this week after last week's 0.55 to 1 bulls (31%) to bears (56%) ratio.  That's all for today.  Thanks for listening.  I hope we'll see you back here 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.