Market Comments March 23, 2009 TSP Fund share prices as of: 03/20/09 Fund - G Fund F Fund C Fund S Fund I Fund 12.8107 12.5529 8.9434 10.4482 11.9325 $  Change - 0.0010 -0.0108 -0.1799 -0.2898 -0.1532 % Chg day - +0.01% -0.09% -1.97% -2.70% -1.27% % Chg wk - +0.05% +0.84% +1.59% +1.84% +6.01% % Chg mon - +0.16% +1.04% +4.72% +3.84% +5.88% % Chg 2009 - +0.55% -0.22% -14.29% -14.41% -16.29%   L2040 L2030 L2020 L2010 L Income 10.9906 11.3061 11.7501 13.2970 12.4659 $  Change - -0.1758 -0.1582 -0.1350 -0.0733 -0.0476 % Chg day - -1.57% -1.38% -1.14% -0.55% -0.38% % Chg wk - +2.47% +2.16% +1.85% +0.92% +0.65% % Chg mon - +4.19% +3.73% +3.20% +1.70% +1.24% % Chg 2009 - -12.00% -10.43% -8.62% -3.87% -2.49%

Today's Comments (Short Term Outlook)

Stocks are facing an overbought test Stocks pulled back again on Friday as the Dow dropped 122-points on the day, and the C, S and I funds lost 2%, 2.7%, and 1.3% respectively.  This week will be a good test for the market as it remains overbought and that is rarely a good thing in a bear market, but many believe we have seen the bottom and that this is the start of either a major bear market rally, or even a new bull market.  So, if the market can rally in the S&P 500 can move above 800 in spite of the recent overbought conditions, it will be a good sign.  I really don't think it can happen, but we have to be open to the possibility. Options expiration Friday was surprisingly very weak.  Many times the market vacillates on expiration Friday, and the big move comes the following Monday, so the fact that the S&P 500 dropped 2% on Friday, should make today interesting.  The futures are up solidly (about 1.6%) as I write this Sunday night, and while that sounds good, Monday morning gap openings are difficult to trust, up or down. The S&P 500 has rallied strongly off of the early March lows, but it has now hit some strong resistance in the form of a declining trend line, and the 50-day moving average.  The 50-day moving average is usually a formidable opponent during a bear market, as you can see below.                    Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The 800 area is now the level to beat if you are a bull.  Right now we appear to have a lower high that followed a lower low - and that is still a downtrend in my book so again, the test is on. Here is the NYSE overbought/oversold indicator, and you can see that it had become quite overbought and is now starting to head down.                    Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk On to sentiment, the CBOE and Equity put/call ratios are showing that, incredibly, the dumb money is on the extreme side of being overly bullish, which is a contrarian indicator and is actually very bearish for stocks going forward.                    Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Last week's AAII Investor Sentiment Survey turned more bullish after the recent rally, and the 1.18 bulls to bears ratio, although not historically very high, is high for this bear market and may also be a contrarian indication for stocks.                     Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk I am a little surprised to see the futures so positive Sunday night, but I have some catching up to do on news events.  I was out of town for 5-days and haven't really kept on top of things.  I didn't want the news to affect my analysis and commentary so I decided to write this before turning on the news.  I still believe that the charts tell the story, not the news. That's all for today.  Thanks for reading.  We'll see you back here tomorrow!