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Today's Commentary
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Beware the rebound
Stocks rebounded nicely on Thursday with Dow jumping 161-points. I'm
not complaining but there is a long way to go before this market is out of
the woods.
For the TSP, the C-fund
gained 1.34% yesterday, the S-fund
picked up 0.58%, the I-fund played catch up jumping 2.89%, and the F-fund (bonds)
lost 0.18%.
As we have been talking about,
the market was due for a rebound and this 1.3% rally is a nice start but the
test will come at the 50 and 20-day EMA's - if we can get there. The
futures are up again Thursday night so it is looking good for now, but those
resistance areas are not going to be easy to get through.
Chart provided courtesy of
www.decisionpoint.com, analysis by TSP Talk
A lot of damage has been done and it would be very surprising if this
market can just break above all of that overhead resistance. The
triangle formation that we have been watching has nearly expired - but not
officially. We expected a fake-out move and this downside sell-off
could be it, but time is running out for that play to work.
The only reason I am still even considering it is that the triangle fake-out
/ breakout is still very much in play on the Dow Transportation Index, so if
the leader wants to go that way, the S&P 500 still has a chance.
Chart provided courtesy of
www.decisionpoint.com, analysis by TSP Talk
The I-fund has been hit hard recently because of the huge losses in Japan's
Nikkei Index but it saw a rebound yesterday with the help of a 0.9% drop in
the dollar. This is a bad looking chart.
Chart provided courtesy of
www.decisionpoint.com, analysis by TSP Talk
I have had the unfortunate experience of riding this sell-off down in
the stock funds but as I mentioned yesterday, I will look to sell rallies,
either slowly or all at once. Because of the breakdowns in the charts,
I don't have a lot of faith in this market right now, and it will have to
show me that it can get through resistance before I'm a believer. With
yesterday's rally, I added a little G-fund (10%) and will likely add a
little more today if the positive overnight futures hold up into our trading
deadline. (The Dow futures are up 91-points as of 10:40 PM ET on Thursday
night.)
As a reminder, we have a limit of 2 interfund transfers (IFT) per month, but
after #2, you can make additional transfers as long as only your G-fund
allocation increases.
The TSP Talk Sentiment Survey gave another buy signal this week after the 0.75 to 1 bulls (39%) to bears (52%) ratio. The system's allocation remains 100% S-Fund for next week.
Thanks for reading! Have a great weekend!
Tom Crowley
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