Today's Comments (Short Term Outlook)                             Printer friendly

Half full Warren Buffett stepped up making an offer to help out the bond insurers and initially, the stock market rejoiced.  But as the day wore on, despite a triple digit gain in the Dow, the thrill was gone and stocks lost some momentum. The S&P 500 was up nearly 2% at one point, but within a half hour of the close, it has just about lost all of those gains.  A late oversold rally into the close brought it back to a respectable 0.70% gain.                                               Chart provided courtesy of www.decisionpoint.com  Small caps managed about half of that gain, but the international stocks (I-fund) did manage to hang onto its 2% gain.  I actually went into the TSP site and made an interfund transfer early yesterday to get back into stocks after the breakout of the trading range we talked about yesterday, but ironically things went too well as the Dow hit the +200-point market near the deadline.  I decided to back out and cancel the transaction.  That was too much, too fast for me to be a buyer.  I was hoping to buy a break to the downside.  I took into consideration that this is an options expiration week and sometime big gains can be reversed very quickly, and I also looked up the historical seasonal data leading up to, and after President's Day.  It made the decision easier to back off.                                       Chart provided courtesy of www.sentimentrader.com I am going forward thinking we are still in a downtrend where we will get some short-term opportunities buy IF the setup is just right.  I believe it will happen soon, but again we want to keep our guard up and err on the side of being too cautious in this environment. It will be interesting to see how the market follows up to yesterday's half-full / half- empty scenario.  We had the breakout to the upside of the trading range, but the rally lost some steam.  We could see some continued momentum but I am not too enthused about buying here. The rally seemed forced because of the Warren Buffett announcement, and we could see some quick profit taking. That's all for today.  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.