Today's Comments (Short Term Outlook)                             Printer friendly

Time for bonds? Stocks were relatively flat on Monday, overcoming some early weakness.  Not bad action after Friday's rally but the S&P is still overbought and near resistance. The question on everyone's mind is whether the market is near the top of a bear market rally, or if instead we are ready to see a breakout to the upside, confirming what could be a bottom.  I would love to know that the market is out of the water but it is too risky for me, so other question to ask is, are bonds still a good play or should we just stick with the consistency of the G fund as a safe haven? Checking the yield on the 10-year T-Note, last week's move up hit resistance, and turned down sharply by the close.  Monday's lower low is making it look more like a reversal.  If this downward trend in yields is going to continue, could it be time to consider bonds again?                          Chart provided courtesy of www.decisionpoint.com - analysis by TSP Talk You would think so because when bond yields move down, bond prices and the F-fund tend to go up.  But the AGG is actually forming a descending triangle, which is a bearish formation during a bull market (which bonds are in.)                         Chart provided courtesy of www.decisionpoint.com - analysis by TSP Talk So, the jury is still out on whether it is time for bonds again.  The descending triangle tells me to take the certainty of the G-fund for now.  If the AGG can break to the upside of the descending triangle, then we might have something. I am still looking for the stock indexes to fill some gaps on the downside in the short-term, as we talked about yesterday.  It seems to be the path of least resistance right now.  That's all for today.  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. ------------------------------------------------------------------------------------------------------------------- ** By joining our email alert list you will receive an email each time we initiate a transfer or change our market outlook.  You may also receive an email each Monday morning reminding you that our comments are updated daily.  We will always send out these emails prior to making the transfer myself but we can not guarantee you will receive it in time to make a transferide to follow our transfers in your own account, you do so at your own risk.  There is always a possibility for a loss in your account.  These transfers could come very often and you may have to act quickly to make the deadline.  Please consider your investment strategy before taking any advice or making any transactions.  By reading the contents of TSP Talk.com and accepting the email alerts, you must agree to the Terms of Service.  Thank you. TSP Talk