Market Comments March 6, 2009 TSP Fund share prices as of: 03/05/09 Fund - G Fund F Fund C Fund S Fund I Fund 12.7956 12.4802 7.9353 9.1733 10.5727 $  Change - 0.0010 0.0580 -0.3501 -0.4692 -0.3618 % Chg day - +0.01% +0.47% -4.23% -4.87% -3.31% % Chg wk - +0.04% +0.45% -7.08% -8.83% -6.19% % Chg mon - +0.04% +0.45% -7.08% -8.83% -6.19% % Chg 2009 - +0.43% -0.80% -23.95% -24.85% -25.83%   L2040 L2030 L2020 L2010 L Income 9.9346 10.3438 10.9052 12.8116 12.1442 $  Change - -0.3382 -0.3075 -0.2673 -0.1486 -0.0961 % Chg day - -3.29% -2.89% -2.39% -1.15% -0.79% % Chg wk - -5.82% -5.10% -4.22% -2.01% -1.37% % Chg mon - -5.82% -5.10% -4.22% -2.01% -1.37% % Chg 2009 - -20.46% -18.06% -15.19% -7.38% -5.01%

Today's Comments (Short Term Outlook)

Optimism short-lived Just when everyone thought that Wednesday's rally was the start of something positive, the market gave us a dose of humble pie on Thursday.  The TSP stock funds dropped between 3% to 5%, while the F-fund was the benefit of a flight to safety. There was so much optimism after Wednesday's big rally, but we talked about the S&P 500 not being able to climb back above the old support area of 741 within 3 days, and in the past, that has been a bad sign for a quick recovery.  Instead, a new leg down became more likely.                    Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk If there is any positive news, it's the high negativity.  We may still need the "whooosh" before this leg down ends, and the sentiment has become so negative, that it may be sooner rather than later.  I am NOT buying right here based on this because things could get much worse before the the market recovers, but we do want to stay on our toes, ready to jump in so we don't miss out on too much of the reversal that could be explosive once it manifests, and perhaps today's jobs report will be the catalyst.  The estimates for February's jobs report, are for a loss of a staggering  650,000 jobs.  Who knows what will really happen and the market will obviously react strongly, one way or the other, or both.  This week's AAII Sentiment Survey (not our survey) came in at 19% bulls, 70% bears.  70% is about as high as you'll ever see in this survey.                    Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk You'd have to go back to 1990 to see anything close to 70%.  And if you look at the chart of the S&P 500 below, you will see that the week that the survey saw the reading near 70%, was actually a great time to buy.  But there is a little problem.                   Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The problem is, that this current financial situation is much worse than it was in 1990, and the current administration does not seem to be overly concerned about the stock market's losses and who is losing money; meaning we don't know if there is a resolution.  The real concern on Wall Street is that traders and investors have just not heard anything specific enough that they believe can help the situation.  True capitalists would prefer to see the market work it out on its own anyway, allowing the strong to survive, and the weaker to fail or be taken over by other well run privately owned companies, not by the government.  But the actions being taken seem to be hindering the promotion of growth, and that is why the market cannot find support.  I certainly don't believe that President Obama wants our economy to deteriorate.  The poor guy inherited this mess, but he also volunteered for the job and knew what he was getting into, so it is now in his lap.  His insistence that the government play a larger role in the process is not helping, and the people working for him aren't helping him very much.  I wouldn't want to be in his shoes, but I do hope they get it right.  It is a very sticky situation.  That's all for today.  Thanks for reading.  Have a great weekend!