Market Comments February 11, 2009 TSP Fund share prices as of: 02/10/09 Fund - G Fund F Fund C Fund S Fund I Fund 12.7733 12.5269 9.5856 11.3547 12.5489 $  Change - 0.0009 0.0842 -0.4936 -0.5059 -0.5634 % Chg day - +0.01% +0.68% -4.90% -4.27% -4.30% % Chg wk - +0.07% +0.43% +0.30% +1.32% -0.05% % Chg mon - +0.07% +0.43% +0.30% +1.32% -0.05% % Chg 2009 - +0.26% -0.43% -8.13% -6.98% -11.97%   L2040 L2030 L2020 L2010 L Income 11.5796 11.8242 12.1810 13.5009 12.5851 $  Change - -0.4417 -0.3943 -0.3379 -0.1773 -0.1123 % Chg day - -3.67% -3.23% -2.70% -1.30% -0.88% % Chg wk - +0.42% +0.39% +0.33% +0.22% +0.18% % Chg mon - +0.42% +0.39% +0.33% +0.22% +0.18% % Chg 2009 - -7.28% -6.33% -5.27% -2.40% -1.56%

Today's Comments (Short Term Outlook)

I guess sometimes the obvious happens Stocks dropped sharply yesterday while bonds rallied, apparently because investors thought the bank rescue plan lacked details.  The TSP stocks funds lost between 4% and 5%.   Since the market rallied over the last week or so, I was expecting a sell-the-news reaction to the stimulus passing through the senate, but I actually thought it might be too obvious of a play since so many were predicting the same thing.  I was half wondering if that meant we'd see a rally instead.  That did not happen. The S&P 500 lost nearly 5% coming to rest, where else, directly on top of the rising support of the wedge pattern.  This leaves us hanging as to whether we see a break to the downside, or another rebound back into the wedge.                      Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Things deteriorated technically for the S&P as it is now back below the 20-day moving average, but I am still watching the MACD for what appears to be a divergence.  But there is a caveat.  The MACD indicator is a more useful indicator when markets are trending.  Right now the market is not trending, but rather oscillating, and a better indicator to use during an oscillating market is an overbought/oversold type indicator.  If the S&P 500 ever decides on a direction by breaking through the upper or lower end of the wedge, then maybe we will see a better trend develop. The NYSE overbought/oversold indicator had become overbought, but it was well below the extreme overbought reading we saw in early January.  What has become extreme are the put/call ratios. I post the Equity, CBOE, and OEX put/call ratio charts here frequently, but I'll use the sentimentrader.com's chart today, since they've already put the nice dots in for us.  Basically this says the herd, or the dumb money, have become extremely bullish, and that tends to precede short-term market peaks.  Yesterday's sell-off did little to alleviate this.                                     Chart provided courtesy of www.sentimentrader.com Bonds, shown below as the ETF called AGG, rallied sharply yesterday as fear rose in the investment world.  I am not a big fan of bonds for more than a short-term play, but I have been attempting to catch an oversold bounce all month, and yesterday may be the start.  I will not linger in the F-fund very long.                    Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Here's the 30-year bond.  You can see the technicals a little better here as the pullbacks have been filling the gaps created on the way up.                      Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk It is already at resistance nearing the 20 and 50-day moving averages, but a move to 130 is not out of the question.  The problem is, 120 is likely in the cards in the intermediate-term because of the open gap down there. Lastly, a quick look at oil shows a minor break in the price.  How low can it go?  The December lows will be the next test.                      Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Oil has been down on the global economic slowdown, but if the dollar starts to weaken (as it nears resistance), oil could start to rebound.  If the dollar stays strong, we could be seeing lower lows in oil, which will be nice for the consumer. That's all for today.  Thanks for reading.  See you tomorrow!