Last week ends on a low note:  It's now or...

A fair game game yesterday but it left me feeling like there could have been more.  Seattle didn't really step up and take advantage of all of the opportunities it had.  It sort of reminded me of my recent allocation.  I have been expecting more weakness before the market can make a real double digit gain run, but I have missed many opportunities along the way.  Like Seattle, there is always another year but we have to start working now to improve our results.  Is the market ready for that "real" pause now?

From a technical standpoint the market really needs to bounce here or we may be seeing an intermediate term change in character.  It looks as if the lows of the 200 Dow point sell off on 1/20 are going to be tested early this week.  A break of those levels and the resistance trend line I drew in below in black, will become a reality.  Technically it is not a resistance level until the 1/20, and the week after, low is penetrated.


                                  Chart provided courtesy of www.decisionpoint.com

The question on most investors' mind is, how long is this weakness going to last?  Intermediate and longer term tops aren't usually very apparent.  Many market bottoms are formed by an obvious "V" or "W" pattern.  Tops seem to take longer and can be frustrating for both bulls and bears.  We could see moves up and down for a while and if we are near an intermediate top, it could work it's way down but not before a few head-fakes back up.  This is when you trust your indicators as your emotions will be put to a test.

Only a few weeks ago we were talking about how people were leaning more toward large cap stocks over small cap, according to the amount of money in the Rydex mutual funds.  Since we take the contrarian role we suggested that small caps may continue to outperform because of this - and they have.  But there has been a change in sentiment in small caps.  More money is now going into the small caps funds over large cap which makes us believe that if one were to be in the stock funds over the next several weeks, it may be the S&P 500 stocks (C fund) that outperforms the small cap (S fund).  Something to consider if you remain in stocks.  This chart depicts that.

       
                                    Chart provided courtesy of www.sentimentrader.com
  
Bonds have become somewhat oversold but the pressure of rising interest rates and the recent break of the bullish trendline in bonds has me more cautious at the moment.  The G fund should pay it's penny gain today so it is up to you whether you want to risk possibly giving that gain back trying to catch a bounce in the recently questionable bond market. 

I usually have more to say on a Monday morning.  I don't know if it's the Super Bowl partying or just a question mark for the short term, but I don't have much to add.  I expect weakness to continue but I also can see the market trying to lure you back in prematurely with a few days of strengths throw in there.  Be careful.  Go in with a plan and execute it.  Keep your emotions in check.

Administrative note: The free trial offer for the TSP Timing Newsletter is over but you can still see a sample newsletter in the member's area. 

I am still working on the more "standard" credit card and e-check payment option for non-PayPal members.   I hope to have that online some time this week.

That’s all for today.  Currently 100% G fund.  Thanks for reading. 

RevShark's TSP Timing Newsletter is now available.  You can go to www.tspalk.com/members to sign up for the free trial.  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.

Once the trial period is over, the regular subscription price will be $19.95/month which will include 4 to 5 weekly newsletters each month.  The newsletter will be in PDF format so you will need an Adobe Reader (Download it free here.)

Still have questions about the TSP Timing Newsletter?  Click here.