Today's Comments (Short Term Outlook)                             Printer friendly

Lowest close in 18 months What can we say?  The I-fund dropped 1% yesterday, the C-fund lost over 2%, and the S-fund shed nearly 3%.  Today we get the February jobs report and the fireworks should continue.  Whether that will be up or down - I don't know. You can see that all three of the stock funds have really been hit hard this year.  Of the three, only the I-fund has not lost all of its 2007 gains as it gained over 11% last year.    Fund - G Fund F Fund C Fund S Fund I Fund % Chg 2008 - +0.65% +0.59% -10.81% -10.76% -10.38%   L2040 L2030 L2020 L2010 L Income % Chg 2008 - -8.66% -7.58% -6.31% -3.36% -1.63%   Rearview mirror investing is always easier.  Obviously the place to have been in 2008 has been in the G and/or F-funds.  Our premium services have spent a lot of time in those two funds and have done better than the stock funds, but it has still been difficult dodging all of those losses.  RevShark has fared best so far in '08 as his TSP Timing System has managed a gain of +1.33% this year.  Trader Fred has a 3% loss - not bad considering.  The Ebbchart TSP system is down 6.4% but it had been down nearly 8% at the end of January.  Many of you remember how explosive that system was in 2007 so we'll see how it can come back from this bad start.  Again, they all have beat a fully invested buy and hold strategy.  The L-fund have been hit hard too, but since they have some G and F fund in them, they have outperformed the stock funds. Yesterday's close of 1304 for the S&P 500, was the lowest close in 18-months.  That's not a good sign for any buy and hold investor.  I wish we were getting more volume on this sell-off.  We are seeing some indicators showing signs of fear, but we'd like to see a panic / capitulation type sell-off on high volume to show us that the last of the holdouts have given up.  That's when markets stop going down and when there is the most money on the sidelines to use to buy.  Soon, soon.                                  Chart provided courtesy of www.decisionpoint.com                          Bonds have been stuck in a rut the last week or so.  The yield of the 10-year T-note has filled the gap created last week.  I suspect that the jobs report today will tell us if this is a fill-the-gap and continue down formation, or if yields are in fact bottoming.  When yields go down, bond prices and the F-fund generally go up.    When yields go up, bond prices and the F-fund go down.                                      Chart provided courtesy of www.decisionpoint.com The AGG (F-fund) is also at a make or break level of support.  Again, the jobs report should shed some light if this support will break and bonds will come down (yields up), or if they can stay in the uptrend.  It's now or never.                                  Chart provided courtesy of www.decisionpoint.com The TSP Talk Sentiment Survey came in at 26% bulls, 61% bears, for a 0.43 to 1 ratio.                             That is one of the lowest ratios we have seen during this correction / bear market, and we have  seen a little pattern of the market rebounding when the ratio gets below 0.60 to 1.  It is not always instant gratification, but we should see some relief in the next week or so based on this overly bearish reading. Even though it is not my style, this is a situation where someone who is lucky enough to be on the sidelines, might consider nibbling into the stock funds.  The market is getting hit hard and we don't know where the bottom is, so nibbling in maybe 10% at a time every few days will have you buying on the way down with the hope that somewhere near the bottom you'd be close to fully invested again.  But you may have figured out the problem with that approach this year... The TSP has limited our trading and we can not do it and stay within their proposed rules.  We can sell (move into the G-fund) in unlimited increments on the way up, but unfortunately we can no longer buy on the way down more than twice a month. We have the jobs report today.  A rebound here is not an automatic with this highly emotional data, but if the market continues down on this news, we should get a relief rally shortly afterward.  The next FOMC meeting is Tuesday March 18.  I had originally incorrectly stated that it was next Tuesday.  That's all for today.  Have a great weekend and we'll see you back here on Monday morning.    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.