TSP Fund share prices as of: 04/06/09
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Today's Comments (Short Term Outlook)
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Can the bulls keep it going? And Twitter Stocks pulled back yesterday, but things improved dramatically before the market closed. Down almost 3% at one time, the S&P 500 closed down less then 1% on the day. During a bear market, rallies that bring the faster moving averages up toward the slower moving average can indicate an overbought pullback is due. We will likely get some sort of correction or consolidation, but the longer this market does not collapse in spite of the overbought conditions, the more I will be willing to buy a pullback.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk I am not totally convinced that this market is not going to head down sharply again (that's a double negative if you missed it), possibly making new lows, but the recent relentless strength could be an indication that the rally could have more legs left in it. The problem is if that is a wrong assessment, and buying a pullback could create a situation like we saw last fall. Back then I bought into a market that sold off sharply and was very oversold - only to catch another dramatic move lower. So, if you have missed this rally and are chomping at the bit to buy into a pullback, don't get too complacent about it. We have no proof that this bear market is ready to end, but the internal strength is a start. First things first, the S&P has to get above the declining trend line. That would be another good sign that this rally still has some legs. The overbought/oversold indicator has been able to stay in overbought territory without pulling back. That too is a good sign, although we have seen this happen a few times during this bear market.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The prior instances did not end well for stocks, so it's another good test. Strong markets can remain overbought for long periods of time. Weak markets will eventually break under these conditions. The dumb money put / call ratios have again pulled back toward the support of this increasingly bullish trend. Overly bullish readings usually precede weakness in the market but there has been this surprising underlying support of bullishness from the dumb money, despite the damage that has been done over the last six months. This is rather strange behavior in the sentiment world.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The smart money of the OEX put / call ratio, which has not been a very consistent indicator for us lately, is now showing signs of becoming more bearish, which in the past has preceded market weakness, but I have not been able to trust this indicator for several months now. That's all I have for today. I'll mention that I added a link to our Twitter page on our home page for all you Twits or Tweets out there, or whatever they are calling you these days. I have not decided exactly how I will use Twitter, but it will probably act similarly to an email alert, except that it can go right to a mobile device. I just wanted to get it set up as it seems to be the cool thing to do. I am just not cool enough to know why it's so cool. 25-years ago I wondered why anyone would need a PC in their home, so I better take the cool people's word for it and get onboard the Twitter bandwagon. Thanks for reading. We'll see you back here tomorrow! Administrative Note: Access to the TSP & Economic Report premium service will be available free of charge during the month of April. To gain access you will need to set up a free premium service login, if you don't already have one, as you will have to login to gain access. Please click here for more information. (FYI, Scribbler has posted an interfund transfer alert on Tuesday, April 7). |