Today's Comments (Short Term Outlook)                             Printer friendly

Easy come, easy go More financial rumors on Wall Street sent investors and traders packing, trying to lock in gains from the prior day's big rally.  The Dow gives back 300 of Tuesday's 400-point gain.  Easy come easy go. We saw some early morning follow-through to the upside before a steady decline in the afternoon took us down toward the lows.  I would not have been surprised to see a 100-point pullback following a 400-point gain, but the 300-point drop lets us know just how jittery investors are right now.  If we want to find something positive, it would be that Wednesday's high was higher than Tuesday's high, and Wednesday's low was higher than Tuesday's low.  A small higher trend.  Not much consolation.                              Chart provided courtesy of www.decisionpoint.com I posted this chart last year.  It is the 8.6 year business cycle.  It is not telling us when the market peaks and bottoms, but it attempts to tell us the cycle of the economy.  Sometimes the market gets it just right and peaks and bottoms with the economy.  When that happens, it appears the market knows more than we do because economic indicators lag what is actually happening.  It's why sometimes the markets bottom well before evidence of a recovery is reported, or why the market can peak in October, yet some are still debating whether or not we are in a recession today.  By the time we find out for certain - based on rear-view mirror economic data - we could be out of it.                    2008.225 converts to March 21st of this year and it also happens to land on the bottom of an intermediate-term economic cycle bottom.  It's not perfect, but there is a correlation to these peaks and bottoms in this cycle chart when compared to the action of the market.  If March 21st is in fact an intermediate-term economic cycle bottom, we could see the market start recovering now.  But the data of a recovery in the economy could lag by months.  The economic cycle won't peak again until April of 2009.                              Chart provided courtesy of www.decisionpoint.com That's just some FYI while we do the "have we seen the bottom" debate.  I personally think it is a close call.  Buying here is not a bad idea, but I think there could be more damage to be done.  I think the question is, if a bottom comes, is it a short-term bottom or "the" bottom?"  I won't look that far ahead, but I believe between now and the end of the month we will put in at least a short-term bottom, if we haven't already.  Maybe next week.  How ugly it gets in that time... don't know. If you are interested... March Madness on TSP Talk / Yahoo! - Sign up deadline: 1st game tip off today, 3/20/08, at about 12 noon ET.  Prizes awarded.  TSP Talk shirts, mugs, subscriptions, etc. That's all for today.  The markets are closed Friday and the TSP won't post closing share prices.  So, unless something out of the ordinary happens, I may just take the day off.  If that's the case, enjoy your Easter weekend and we'll see back here on Monday. If you haven't already, please take a minute to read Stop Trading! as well as the links at the bottom of that page.  It is time to get involved if you haven't already because doing nothing will likely result in the inevitable - a transfer limit and/or restricted transfers.    Have questions?  Visit our message board for answers.  Would you like to be on our email alert list?  We will send you an email when there is a change to our asset allocation or market outlook.  Your email address will never be given out.  Read our privacy policy.  By signing up you agree to the TSP Talk Terms of Service.  More details below **. Are you bullish or bearish?  Join the Weekly Sentiment Survey. Like what you're reading?  Tell a Friend about us.