Market Comments February 3, 2009 TSP Fund share prices as of: 02/02/09 Fund - G Fund F Fund C Fund S Fund I Fund 12.7657 12.5241 9.5518 11.2725 12.4140 $  Change - 0.0015 0.0514 -0.0053 0.0653 -0.1410 % Chg day - +0.01% +0.41% -0.06% +0.58% -1.12% % Chg wk - +0.01% +0.41% -0.06% +0.58% -1.12% % Chg mon - +0.01% +0.41% -0.06% +0.58% -1.12% % Chg 2009 - +0.20% -0.45% -8.46% -7.65% -12.91%   L2040 L2030 L2020 L2010 L Income 11.5143 11.7640 12.1267 13.4664 12.5608 $  Change - -0.0168 -0.0147 -0.0143 -0.0052 -0.0014 % Chg day - -0.15% -0.12% -0.12% -0.04% -0.01% % Chg wk - -0.15% -0.12% -0.12% -0.04% -0.01% % Chg mon - -0.15% -0.12% -0.12% -0.04% -0.01% % Chg 2009 - -7.81% -6.81% -5.69% -2.65% -1.75%

Today's Comments (Short Term Outlook)                             Printer  friendly

Support held another day Stocks were mixed yesterday as the Dow and International stocks were hit with losses near 1%, the S&P 500 was relatively flat, and small caps actually had a pretty good day.  The F-fund also saw a modest rebound. The S&P 500 opened sharply lower, moved right down to the support of the lower end of the wedge formation, and managed to hang on the rest of the day and actually snuck back toward the break-even mark.  With little else changed, I will bore you today with a little pattern I noticed on the S&P chart.  Here's what I have seen starting in September at point #1. 1- A steep decline lower 2 - A sharp rally higher 3 - A higher low 4 - A move back up to the 20-day moving average That is followed by another leg down.                     Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk It repeated in late October / early November, and if it is going to play out again, we could be looking at a move to the 850 area, where the 20-day moving average is, before we see another push down.  For what it's worth. I wanted to revisit the put / call ratios because the mid-January rally pushed the 10-day moving averages of the CBOE and the Equity put/call ratios back up toward areas that has been trouble for stocks.  Those two indicators are considered the "dumb money".  You can see that the dumb money appears to be getting overly bullish again.                      Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The interesting thing is that the "smart money" OEX put/call ratio, is also quite bullish.  This indicator has been more flaky lately; not really moving with the market or giving us much to go on.  And there could be reasons for that, which I won't go into right now. I have posted this data enough that I will assume you know, when the dumb money gets bullish, it could be time for another push lower for stocks. While we try to figure out what is going on with the market, the economists are busy trying to assess the state of the economy.  So what are they saying?  Thomas Friedman, a well respected economist who writes for the New York Times, should be able to tell us what's going on and when we can expect things to turn around, right? Trader Fred sent me this article:   By Thomas Friedman: ... First, if it is not apparent to you yet, it will be soon: there is no magic bullet for this economic crisis, no magic bailout package, no magic stimulus. We have woven such a tangled financial mess with subprime mortgages wrapped in complex bonds and derivatives, pumped up with leverage, and then globalized to the far corners of the earth that, much as we want to think this will soon be over, that is highly unlikely. More ... http://www.nytimes.com/2009/02/01/opinion/01friedman.html?_r=2 Not exactly a confidence booster.  It sounds like we will be doing more hit and run trading as the buy and hold strategy may continue to be a tough way to make money in this market. As I said yesterday, I expect this to be somewhat of a wild week.  I think we could potentially see a move as high as 852, and / or a low down near 740.  When the market does start to get volatile, it is so much easier to make decisions when you have a plan in place.  What will you do if we see 850, or 740, or whatever?  When it's happening it's easy to get caught up in the emotions of the swings.  OK, lets have a fire drill so we are more prepared when it happens.  Ready?  Ding! That's all for today.  Thanks for reading.  See you tomorrow!