Market Comments March 5, 2009 TSP Fund share prices as of: 03/04/09 Fund - G Fund F Fund C Fund S Fund I Fund 12.7946 12.4222 8.2854 9.6425 10.9345 $  Change - 0.0010 -0.0350 0.1955 0.2582 0.3395 % Chg day - +0.01% -0.28% +2.42% +2.75% +3.20% % Chg wk - +0.03% -0.02% -2.98% -4.17% -2.98% % Chg mon - +0.03% -0.02% -2.98% -4.17% -2.98% % Chg 2009 - +0.42% -1.26% -20.59% -21.01% -23.29%   L2040 L2030 L2020 L2010 L Income 10.2728 10.6513 11.1725 12.9602 12.2403 $  Change - 0.2198 0.2001 0.1758 0.0986 0.0636 % Chg day - +2.19% +1.91% +1.60% +0.77% +0.52% % Chg wk - -2.61% -2.27% -1.87% -0.87% -0.59% % Chg mon - -2.61%% -2.27% -1.87% -0.87% -0.59% % Chg 2009 - -17.75% -15.62% -13.11% -6.31% -4.26%

Today's Comments (Short Term Outlook)

Looking for signs After being down 11 of the last 12 days, stocks rallied sharply yesterday helping the TSP stocks funds gain 2.4% to 3.2%.  If there was a negative to be found, it was that the last half hour gave back a large chunk of the earlier gains.    Still, the action was good and there is a lot of talk about the bottom being in - again.  Should we buy it - the bottom talk, that is? It certainly wasn't the "wooosh" I talked about yesterday, so that makes believe that it could be "A" bottom, but not "THE" bottom.  But there is a little test coming up... The S&P 500 has now closed four straight days below the old support of the November lows.  We have talked about the 3-day test.  The chart below is a little busy, but I marked some areas where the broken support lasted more than 2 days, or less than 3. In the past, if the S&P 500 could rally back up above support within 2 or 3 days of breakdown, you could see a decent rally unfold.  If however, the S&P cannot get back above the old support with 3 days, the downside tends to continue.                    Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Another observation:  The prior two major legs down of this bear market lasted about 2-months each.  This current leg down, which started in early January, has now reached 2-months in duration. After 741 was broken, all eyes were on the 700 area.  We closed below it on Thursday, but yesterday the market was able to climb back above.  Why is 700 important?                                         Chart provided courtesy of www.sentimentrader.com Except for a couple of weaker technical support levels, there is really very little strong support below 700. The NYSE is still oversold and the indicator seems to be forming a wedge.  There is room to move up and down, but the real test could come for the market if the indicator can get back toward zero.                   Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The dollar is still riding high but there are some cracks in the technical picture.  Take a look at the MACD indicator and the major divergence we are now seeing.  Back in August / September, the dollar was rallying while the MACD was moving down.  That resulted in a sharp one month pullback.  That didn't help the I-fund much last fall, but it is a factor.                   Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk We are seeing a similar divergence right now as the dollar has moved up sharply since mid-January while the MACD has not confirmed the strength.  As we have talked about before, the dollar may not be as strong as the chart suggests.  It is more a combination of the the dollar stabilizing while EAFE (Europe, Australia, Far East) currencies weaken. If yesterday's rally in stocks was the real deal, then we'll be looking for some follow-through today.  As far as upside targets go, there is a gap open on the S&P 500 chart near 734, and of course the old support at 741, should now act as resistance. That's all for today.  Thanks for reading.  See you back here tomorrow!