Market Comments March 13, 2009 TSP Fund share prices as of: 03/12/09 Fund - G Fund F Fund C Fund S Fund I Fund 12.8027 12.4491 8.7353 10.2165 11.1547 $  Change - 0.0010 0.0113 0.3436 0.4893 0.1990 % Chg day - +0.01% +0.09% +4.09% +5.03% +1.82% % Chg wk - +0.05% -0.15% +9.92% +11.21% +5.80% % Chg mon - +0.09% +0.20% +2.28% +1.54% -1.02% % Chg 2009 - +0.49% -1.05% -16.28% -16.31% -21.75%   L2040 L2030 L2020 L2010 L Income 10.6611 11.0083 11.4852 13.1456 12.3664 $  Change - 0.3076 0.2801 0.2422 0.1376 0.0914 % Chg day - +2.97% +2.61% +2.15% +1.06% +0.74% % Chg wk - +7.30% +6.41% +5.31% +2.60% +1.82% % Chg mon - +1.07% +1.00% +0.88% +0.54% +0.43% % Chg 2009 - -14.64% -12.79% -10.68% -4.97% -3.27%

Today's Comments (Short Term Outlook)

Do you trust it? Stocks continued to ramp higher as the indices added on another 4% to 5%.  We know bear market rallies can be explosive, so what do you think?  Is this a temporary rally, or have we hit a bottom? Not sure?  You're not alone.  There's a list of experts a mile long on each side of this question.  Every bear [stock] market ever (except this one so far) has put in an eventual bottom and at each one of them there were those who believed it was the bottom, and those who did not and missed out.  Of course there are also those who call a bottom every twenty minutes and are wrong until, well... until they are not.    The S&P 500 has rallied sharply off of the lows made just this past Monday.  We have seen this before and obviously none of the others turned out to be a bottom.  The move above 741 is a good sign, but like the breaking of support, you want to give these breaks above resistance 2 or 3 days to prove themselves.  If the S&P can stay above the 740 area at a time when it has become overbought, we may have something.  Until then, I still have my doubts.                    Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The NYSE is now overbought and, although not quite yet at an extreme level, the +500 area has been a place of trouble for stocks during this bear market.                    Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk I hate to dwell on one indicator, but it is still amazing to me that the put / call ratios (dumb money) are so surprisingly low, meaning the dumb money appears to be quite bullish.  I have a hard time believing that the market will put in a bottom, when they are basically calling for it.                     Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Unless I am missing something, the herd should be given one more "shocker" move lower otherwise sentiment, as we know it, is not working.  When the AAII Investor Sentiment Survey had a bearish percentage of 70% last week, a reading not seen for as long as I can remember, it made sense that the market rallied.  But what investors say (surveys) and what they do (put/call ratios) can be two different things. By the way, the 19% bulls / 70% bears ratio from last week, changed to a more reasonable 28% bulls / 54% bears this week, although that is still a very bullish response (which is bullish for stocks.) Thursday's TSP Talk Sentiment Survey came in at 36% bulls, 48% bears for a 0.75 to 1 ratio.  That is also off the extreme 26% bulls, 64% bears, 0.41 to 1 ratio from last week.  When this survey moves below the 0.50 to 1 ratio, volatility kicks in big time.  I placed an arrow next to the recent weeks with a ratio under 0.50 to 1, and you can see that up or down, the weeks are usually very wild.  This week, although not over yet, was no exception.  The survey has identified the four largest weekly gains of this bear market.  Unfortunately, it also picked out some very negative weeks as well. Here's the bad news: The week following a ratio reading under 0.50 to 1 was down all five prior times it showed up, with an average loss of 5.28%.                   So, we have some good signs that things could be turning around, but we also have reason to be concerned that this rally will fail like all of the others.  This is not an easy call and you have to decide for yourself if the risk is worth it to you.  Those who took the chance this past week did very, very well.  Those who did not, missed some very good gains.  But now what?  I saw some of our savvy members pick up a good chunk of the gains this week, then step aside.  Pretty smart.  We can all learn something from them - hit and run during the bear market is still a good way to go. That's all for today.  Thanks for reading.  Have a great weekend!