Thrift Savings Plan Talk

A needed rest couldn't stop the market.

The market needed a rest and we saw it digesting the recent gains throughout the day yesterday, but by the close the market rallied impressively. This is what I talked about yesterday. Those dips are going to be bought by the folks who are missing this rally, and those bears who are losing money on the short side (see below for a better explanation).

The 15% I have in the I fund has hurt my return during this rally. I will look for a down day in the U.S. markets, and / or a rally in the I fund to move that 15% to the S fund. Watch for an email alert.

Speaking email alerts, I noticed my own email address at work, along with others in my agency, on the blocked list by my email service. This isn't good. This service I provide doesn't do much good if you are not able to receive them. One of our members had the site reinstated after it was blocked by his agency. All you have to do is ask and tell them why you think it is needed. This is what he wrote:

Dear Administrator:

Recently, tsptalk.com was blocked after being identified as a chat website by the web blocking software. I am presenting information why tsptalk.com should not be blocked. Although there are similarities to entertainment message boards, this website is actually an informational site for those who invest a percentage of Federal Government pay into the Thrift Savings Plan.

Because the website's function is to inform those who have invested in Thrift Savings Plan, it is not unlike websites that inform government employees about other benefits, such as Health Benefits Plans. Recently, tsp.gov enabled those with TSP accounts to change allocations on a daily basis rather than a monthly basis.

I am requesting that this website be taken off the list of blocked websites so that our agency's TSP investors can have the best information available when making changes to our investments.

Thank you for your consideration.

If you are not getting your email alerts, or your agency is blocking TSP Talk, it's worth a shot.

That's all for today. Currently 65% C, 20% S, 15% I fund. Until next time...

5/19/05
Inflation numbers means good news for the market.

The CPI (Core Producer Price Index) report came out yesterday and the results are that inflation pressure is subsiding. The market reacted very positively with another triple digit gain for the Dow. Why all the excitement? Lower inflation means the Fed may start putting on the breaks to these interest rate hikes.

Chart provided courtesy of www.decisionpoint.com

So what now? Has the S&P 500 come too far, too fast? Well the fact that pessimism is still high tells me there is a lot of money on the sidelines waiting to get into the market. The bears who have been betting against the market are going to get short squeezed. That means these traders are holding on to these "bets" that the market will go down. The more the market goes up, the more money they lose. I believe they are in a situation where they will have to cover, or buy back these shares of stock that they are short, which will continue to add fuel to the rally.

I know that sounds confusing but bottom line is we should see "buy the dip" type rallies each time the market shows any weakness, from those who are missing this rally. It should give it some staying power. As I mentioned the other day, I can see another 4 or 5 weeks of strength judging by the 1994 chart. That would bring us to the next Fed meeting.

Ever hear the term buy the rumor, sell the news? The market is now moving up on the rumor that the Fed could stop raising interest rates. If the Fed does give the all clear signal in their meeting in June, it may be too late to make any money. The herd will start buying and those of us invested already, may be ready to take some profits (sell the news).

The I fund finally had a big day. The dollar did pullback some so I believe I am just days away from getting out of the I fund completely.

Another short market comments. I'll let the market tell the story. Currently 65% C, 20% S, 15% I fund. Until next time...