Market Comments February 6, 2009 TSP Fund share prices as of: 02/05/09 Fund - G Fund F Fund C Fund S Fund I Fund 12.7685 12.4601 9.7960 11.4791 12.7600 $  Change - 0.0009 0.0067 0.1574 0.1424 0.0480 % Chg day - +0.01% +0.05% +1.63% +1.26% +0.38% % Chg wk - +0.03% -0.10% +2.50% +2.43% +1.63% % Chg mon - +0.03% -0.10% +2.50% +2.43% +1.63% % Chg 2009 - +0.22% -0.96% -6.12% -5.96% -10.49%   L2040 L2030 L2020 L2010 L Income 11.7407 11.9675 12.3036 13.5618 12.6219 $  Change - 0.1134 0.1025 0.0881 0.0492 0.0329 % Chg day - +0.98% +0.86% +0.72% +0.36% +0.26% % Chg wk - +1.82% +1.60% +1.34% +0.67% +0.48% % Chg mon - +1.82% +1.60% +1.34% +0.67% +0.48% % Chg 2009 - -5.99% -5.19% -4.32% -1.96% -1.27%

Today's Comments (Short Term Outlook)

Jobs and stimulus We expected a wild week this week, and stocks have been very volatile.  Wednesday stocks opened higher and dropped sharply by the close.  On Thursday it was the opposite - a weak open and a strong close.  All of the stock funds were up on the day. The catalysts should be earnings, the stimulus package, and the jobs and other economic reports, but it is obvious that there is a lot of uncertainty as the market continues to trade in a range, although the range is getting tighter and tighter.  Some earning are good, some bad.  Stocks jump up and down.  Some economic data is good, some bad.  Stocks move up and down.  The stimulus package is passes in the House, but it's not so easy in the Senate.  Up and down. The S&P 500 is in the midst of two wedge patterns, the large wedge (black channels) and the smaller (red and lower black).  I suspect that today's jobs report, or news on the stimulus package will break one or both of the wedges.  I have talked all week about the pattern that I see forming where the 20-day moving average becomes the barrier on the up side, and after two attempts to move higher, it is holding this time as well.                       Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk A move to the upper end of the wedge (~900) is not out of the question, but I think that would set up a huge selling opportunity.  The problem is, there is an equally good chance that the 20-day moving average holds, in which case the downside action could start at any time; even today, as we saw with the previous examples above. Our TSP Talk Sentiment Survey moved into neutral territory with a bulls (34%) to bears (51%) ratio of 0.67 to 1.  That keeps the system on a buy signal for next week since this week's signal was a buy.  By the way, the system is up +2.7% in 2009 with its new parameters The AAII Investor Sentiment Survey was rather strange this week.  The bullish percentage remains 25% but the bearish percentage moved from 47% down to to 31%.  What's strange is that the 25% bulls and 31% bears are both the lowest readings in several months.  That means 44% were unsure or neutral.                      Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk I'm not sure exactly what that means for the market since the 25% bulls is low enough to be bullish for stocks, but the 31% bearish reading is low enough to be bearish for stocks. To break the tie on sentiment, I'll go back to the put / call ratios.  Surveys tell us what people are saying about the market, and put/call ratios give us a better idea of what they are actually doing.  I am hearing a lot of talk about the bearishness being overdone, but this chart tells us a different story.  This is a sign of complacency and I am not comfortable being in stocks with the put / call ratios this low (low in number, high on the chart) especially while we are in a bear market .                    Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk A bear market rally will come again, maybe even before this month is over, but to me the charts and  indicators are not painting a pretty picture so if we sell-off again, we can't say that we weren't warned. That's all for today.  Thanks for reading.  Have a great weekend!