TSP Fund share prices as of: 02/17/09
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| Today's Comments (Short Term Outlook) |
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Unraveled The market broke down again yesterday, convincingly breaking the wedge formation, and handing the TSP stock funds losses of 4.5% to 5%. The F-fund was the recipient of a flight to quality while stocks were being pummeled. For the second time in three days, the S&P 500 broke below the wedge support, this time closing there. The PMO indicator is back in sell territory and while we could see a snap-back rally soon, the danger is very high.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk With the wedge support broken, and the 805 January low taken out, the next likely step is a retest of the lows made in November (~741). The market rarely makes it that easy so we could easily fly right past 741, or we could see a quick rebound just to give the bulls some hope, and the bears something to worry about. Back in September/October, the market saw a similar break of prior lows, and an immediate snap-back rally back toward the breakdown area, before a serious waterfall-like decline kicked in in early October. Many people, including myself, were caught on the wrong side of that looking for an oversold bounce that came, but did not last very long. We could be in a similar situation here and anyone brave enough to try to buy this week may want to be very careful and consider just a hit and run move. There was a large gap left open at Tuesday's open as Friday's low was 825 and yesterday's high was 818. That could mean a possible short-term move toward 825 sometime soon (this week or next?). But where it goes from there is anyone's guess. If the November lows near 741 are tested and hold (on a closing basis), we could be looking at another intermediate-term buying opportunity. However, if it does not hold things could get very ugly. The market remains in a bear market and bear market rules continue to apply until further notice. That is, sell rallies. The indicators are not really too extreme. The market is oversold, but not at an extreme. The sentiment surveys are overly bearish, but really at extremes yet. The put/call ratios are actually overly bullish (which is bearish for stocks). These could all easily change with another day or two of selling so things could get tricky in the coming days. Let's see what happens today before speculating any further. The gambler in me would like to be a buyer at some point this week or next, but again, it will be a short-term position as I continue to play hit and run with my interfund transfers. Attention Trader Fred subscribers: Fred is adding a second TSP model to his TSP System, the TSP Aggressive Monthly Trader, which will complement the current TSP Monthly Trader, but as the name suggests, will be a little more aggressive. It will begin operation on Monday March 2, 2009 and will simply be added to the current Trader Fred page. Here are a few details: - The TSP Aggressive Monthly Trader uses the I fund, S fund and F fund. - The TSP Aggressive Monthly Trader has made January and February trades for a total gain of +1.05%. - The historic back testing shows the TSP Aggressive Monthly Trader trades about seven round trip times per year (which would be 14 interfund transfers). Investment risk always increases when time is spent in the bond or stock market instead of in the G Fund. This happens because the possibility always exists a TSP Trader trade may not be profitable. Investing in the bond or stock market is gambling, as past performance does not guarantee future performance. That's all for today. Thanks for reading. See you tomorrow! |