Market Comments March 17, 2009 TSP Fund share prices as of: 03/16/09 Fund - G Fund F Fund C Fund S Fund I Fund 12.8067 12.4320 8.7730 10.1128 11.4315 $  Change - 0.0030 -0.0168 -0.0303 -0.1463 0.1756 % Chg day - +0.02% -0.13% -0.34% -1.43% +1.56% % Chg wk - +0.02% -0.13% -0.34% -1.43% +1.56% % Chg mon - +0.13% +0.06% +2.72% +0.50% +1.43% % Chg 2009 - +0.52% -1.18% -15.92% -17.16% -19.81%   L2040 L2030 L2020 L2010 L Income 10.7222 11.0641 11.5385 13.1766 12.3862 $  Change - -0.0031 -0.0027 0.0014 0.0014 0.0004 % Chg day - -0.03% -0.02% +0.01% +0.01% +0.00% % Chg wk - -0.03% -0.02% +0.01% +0.01% +0.00% % Chg mon - +1.65% +1.51% +1.35% +0.78% +0.59% % Chg 2009 - -14.15% -12.35% -10.27% -4.74% -3.11%

Today's Comments (Short Term Outlook)                             Printer  friendly

Looking toppy again Stocks were mixed yesterday with the Dow closing relatively flat, small caps losing 1.4% and, with the help of weakness in the dollar and the fact that stocks sold off late in the day, the international fund picked up 1.6% on the day.  It (the I-fund) will likely do a little pay back tomorrow.   You could say that after a 4-day monster rally, stocks were due for a break, but the modest losses came as a result of a pretty high volume reversal day, making it a little more bearish than would appear on the surface.  The Dow had been up 170-points at one point, well over 2%, at 2 PM ET, before things went south. The S&P 500 is flirting with resistance and reversed down creating a reversal - or swing day.  It doesn't necessarily mean today will be down, but the odds favor it.  There is now going to be a little battle between 740 and 800 with the 2002 market low (red dashed line) somewhere in the middle.                    Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk I have to bring this up again because it has been one of the most dependable indicators we have had during this bear market.  The 10-day moving average of the CBOE put/call ratio, is now at a level that has been a major obstacle for stocks since the market peak in 2007.                     Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk This is considered the "dumb money" and the 0.82 ratio is telling us that they are surprising quite bullish.  Can the market continue higher in the face of a sentiment indicator this bullish?  Sure, but why would this time be any different?  I will use this indicator until it doesn't work any longer.  But right now it is one of the best we have and it is telling us that the market is looking toppy. The problem with being bearish is that yes, we could have seen the market bottom and that means we would miss out on the initial rally, which can be quite strong.  But we are still in a bear market.  There has been no indication otherwise.  The market is still in an obvious downtrend, it has become overbought, the dumb money is showing us that they are overly bullish, and when you add that up, it seems like a perfect formula for a sell signal. When we start seeing evidence such as the 20-day moving average crossing over the 50-day moving average, and more importantly the 50-day moving average crossing over the 200-day moving average, then we can be more confident that a new bull market is starting.  But until then, the bear market rule applies - Sell rallies. That's all for today.  Thanks for reading.  See you tomorrow!