Today's Comments (Short Term Outlook)                             Printer friendly

Is it all priced in? IBM's midday positive guidance gave stocks the lift they seem to have been waiting for.  The market has been starved for good news and it has responded well the last three days when it has been delivered.  But what happens when the next bad news comes out?  Is it already priced in? The S&P 500 made an impressive move higher but it is now bumping up against the 50-day moving average, which could be a problem.  During a bear market, a 2 or 3 day rally usually means sell, so the market will be tested right here, right now.                                     Chart provided courtesy of www.decisionpoint.com  If it can break through here, we're looking at 1405 and 1445 as the next areas of resistance.  The main question again is, has all the bad news been priced in already or will the next wave subprime / foreclosure / credit issues / etc., be enough to hold up the rally? As we know, oil has been hitting all-time highs and just as we talked triple bottoms not holding in early January for stocks, triple tops don't usually hold either.  That could mean another leg higher for oil in the coming weeks.  |                                    Chart provided courtesy of www.decisionpoint.com  On to gold:  There doesn't seem to be much stopping the price of gold lately either.  Whether due to demand (like oil) or to inflationary and economic concerns, gold continues to make new highs as well.  This should be telling us something.                                    Chart provided courtesy of www.decisionpoint.com  The U.S. dollar is still falling.  Although it has reached a lower intraday price, yesterday it put in it's lowest close to date.  Another piece of the 'be careful' puzzle.                                   Chart provided courtesy of www.decisionpoint.com  Bond yields have been in a downtrend since last summer but the yield of the 10-year treasury note is now in the upper end of the trading channel.  Since yields move counter to the price of bonds (and F-fund) I have been interested in playing the F-fund in lieu of the G-fund during the last week while stocks are still correcting.  With the futures indicating a 50% change of another 0.50 rate cut in March by the Fed, I would be surprised if this trends end now.  If it does, we'll know soon enough.                                     Chart provided courtesy of www.decisionpoint.com  Granted, stocks appear to be making a move higher, and I missed the play, but the trend remains down and buying stocks while in a bear market can be dangerous.  Some bear market rallies can be very strong but I am looking for a reversal back down in the near future.  Until we get a test of January low I will have a hard time trusting the stock funds.  I could be wrong, and if I am, we'll get a better technical set up to buy down the road. Try the new Windows Vista Sidebar Gadget for TSP fund quotes by the Reed Consulting Group.  See the fund quotes right on your desktop.  Pretty cool.  Requires Windows Vista. That's all for today.  Have a great day and 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.