Time to be nimble 

Get your coin out, and call it in the air.  The short term is getting rather fuzzy.  There are compelling reasons in both the bullish and bearish camps as to whether the market moves higher or lower from here.

Of course we never really know what will happen but we usually have a good idea, or at least want to think that our indicators are giving us an idea of the next higher odds play for the market.  Right now things are mixed and whatever you decide, you may need to prepare to be nimble.

The S&P 500 has done well to climb back to the highs made in early January.   This area has, and could continue to, act as resistance.  Bull markets continue to move through these resistance points and weak markets will back off.  Many times the market breaks though only to pullback shortly after.  So it is a tough call at this juncture.  The market seems to be performing well, but there are signs that it could roll over just as easily as move higher.


                             Chart provided courtesy of www.decisionpoint.com


The overbought/oversold indicator has been stuck in this overbought position near 500 (see chart below.) for about a week.  Other than the very strong first week in January, the market has not been able to move this indicator much high than 500 since early July of last year.  We've had some strong rallies since then but most of them began when the market was oversold.  It gets more difficult to move higher from this level.


                             Chart provided courtesy of www.decisionpoint.com

Again it can go either way and if you are heavily invested in stocks I would suggest keeping a close eye on things "just in case".  The risk of being on the sidelines is that the market can continue to climb this wall of worry without you.  But how strong is this wall of worry?

Our recent TSP Talk Sentiment Survey has the bulls at 58% and the bears at 24%.  That's well over the 2 to 1 ratio that has signaled trouble in the past.  For this reason I have a hunch that this week we could see something to spook investors.  I have seen a couple of these types of indicators that are showing more complacency out there.  Complacency can quickly turn to worry.

Subscribers of RevShark's TSP Timing Newsletter have been rewarded nicely since its inception four weeks ago.  In those four weeks the Newsletter's return was +1.23% while the return of the G, F, C, S and I funds were +0.27%, +0.19%, +0.57%, +0.12% and +0.27% respectively.  Beating almost every fund by about 1% in four weeks may be too much to ask every month, but you have to be a little impressed with the start. 

That’s all for today.  Currently 65% G fund, 35% I fund.  Thanks for reading.  See you tomorrow.
 

RevShark's TSP Timing Newsletter is now available.  You can go to www.tspalk.com/members to sign up.  TSP Timing is a weekly newsletter giving subscribers a target allocation determined by professional hedge fund manager James 'RevShark' DePorre.   Subscribers will navigate the financial seas along side the Rev while he manages millions of dollars for private investors.  Each week he will highlight TSP funds and a target allocation he believes will provide the best investment potential. The newsletters will go over charts of each fund with a technical breakdown of each by RevShark.  The subscription now includes a midweek updates as needed.

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