Today's Comments (Short Term Outlook)                             Printer friendly

Interesting test for the market Stocks pulled back some yesterday, and that's to be expected after the rally we have seen over the past week or two.  The little topping action we are now seeing brings up an interesting test for stocks. During the bear market, selling when the S&P 500 reached above the 20, and 50 day moving averages has been a wise move.  The question is, will it different this time since we appear to have put in a successful test of the January lows?  Maybe, maybe not. The market can pull back here and it would be a healthy refueling after the energy it expended during the 7-8% rally from the low to the recent peak.  But a dip here would put in a lower high, and it would be at a point where we were worried about resistance, vis-à-vis, the moving averages and the downward trendlines.                                  Chart provided courtesy of www.decisionpoint.com This could mean another move down, but the support below is getting strong as well.  If the low holds we could be looking at a wedge or a falling wedge pattern, which are bullish, but the short-term could give us some trouble.  The smart-money indicator - the 10-day moving average of the OEX put/call ratio - is showing signs of some possible short-term selling pressure.  The 1.32 to 1 ratio of puts to calls is highest reading (lowest direction-wise on the graph) all year.  Each of the previous moves down below 1.20 has proven to be a good short-term sell signal.                                 Chart provided courtesy of www.decisionpoint.com So, the long-term investor / market timer in me says we had a nice intermediate-term buying opportunity when the January lows were tested and held, earlier this month.  The short-term trader / market timer in me doesn't like the look of this possible lower high forming.  Not that I suspect we are going to crash or anything like that, but we are still in a bear market and the indices became overbought, reached resistance, and this pattern is starting to look familiar.    That's all for today.  In case you missed it, I will repost yesterday's message about NTEU's National President commenting on the Federal Retirement Thrift Investment Board transfer limitation proposal.  Thanks for reading and we'll see you tomorrow... 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 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.