Today's Comments (Short Term Outlook)                             Printer friendly

Good day Stocks took a well deserved rest yesterday as the indices churned near the break even market most of the day.  Small caps and the International fund continued their strong performance, but the story of the day was that stocks hung in there despite some weak economic data. The S&P 500 is now trading above the 50-day moving average and I believe if stocks can hold up the next day or two, it will be a very good sign for the intermediate-term.  With the market getting overbought, it has enough reason to pull back, so if it can hold above the 20-day moving average, again - great sign.                                  Chart provided courtesy of www.decisionpoint.com One thing to look out for in the short-term:  I have noticed that stocks tend to pull back (short-term) when the 20-day moving average moves above the 50-day moving average for the first time after being below it for any length of time.  The opposite is true during sell-offs; when the 20 DMA goes below the 50 DMA, we can see an oversold rally. We're not there yet, but if/when it does cross above, the pullback could set up an little oversold little buying opportunity.  The current rally is getting a little long in the tooth and if/when the 20 moves above the 50 in the next week or so, we should see that little pull back.  I have circled a few examples in the above chart.  You can see the cross over caused just a little blip in the opposite direction. But once the 20 DMA crosses above the 50 DMA a second time, I see it as a longer-term buy signal. Comparing this year's chart to 1998, we are at about the point where the S&P 500 really started to take off.  let's see if the rhyme continues.  Interestingly, in 1998 the 20 DMA crossing the 50 DMA did not trigger a short-term pullback.                                  Chart provided courtesy of www.decisionpoint.com That's all for today, but before I go I want to point out some positive news on the proposed interfund transfer limit situation.  We have been getting some support from the unions.  They seem to "get it."  Not all of the people that have been contacted have understood our position.  They hear the TSP saying costs are up, so limiting transfers seems like the right thing to do, but we know it is more complicated than that and now, we are starting to get some feedback that others do understand.  I have posted the letter that the NTEU National President sent to its members and the one the comments they sent to the Federal Retirement Thrift Investment Board.  You can read them here... Letter to members  and comments sent to Board. You can read the more about this exciting news in TSPshareholder.org's latest newsletter.  This organization has been working very hard on this issue. Remember, the deadline to send comments to the Board is April 9.  Please let them know how you feel about the proposed changes.  It doesn't have to be long, just a quick note telling them your opinion.  Is your union getting involved?  Send this information to them and ask what their position is on the issue.  Ask them if they understand the situation and if they would be willing to comment.  If they are unaware of the situation, please ask them go to TSPshareholder.org for more information and a contact.  James Pratt will be more than willing to help.  Thanks.  It could be our last chance to make an impact on the decision. FRTIB IFT limit rule posted on Federal  Register!  | Fax comments online | Sample comments Thanks for reading!  See you tomorrow. 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.