Market Comments June 12, 2009  Current TSP Share Prices

Today's Comments (Short Term Outlook)

Weak dollar, higher prices After being up nearly 140-points earlier in the afternoon, the Dow only managed to hold on to a modest 32-point gain by the close.  The C and S funds were each up near 0.6% and the I-fund added another 1% after more weakness in the dollar yesterday.  The F-fund was up about 0.3%.        Despite closing well off of the highs, the S&P 500 actually made another new high (since November) and had its highest close in 2009.  The consolidating chart does look pretty good good, but it also looks very vulnerable.  We talked about the cup and handle yesterday, which is a bullish formation, but that MACD indicator continues to show a major divergence, and there is now a rising wedge forming, which is short-term bearish.                 Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk This market may be climbing a wall of worry, as the bears continue to be left behind, but once again there is something in the air that makes me think this is not going to end well.  It may not be today or this month, but I don't believe anyone on the sidelines should be looking to buy here.  The above chart looks a lot like the peak of other bear market rallies. The dollar is not looking very good either as it found resistance at the 20-day moving average on its recent bounce.  And if you think this is going to improve any time soon, the long term sell signal has been given as the 50-day moving average is now below the 200-day moving average.  As we talked about several weeks ago, a falling dollar is not always a bad thing for stocks - particularly commodity stocks.  Of course the I-fund also benefits.                 Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Here we have a chart of oil, another beneficiary of the weakening dollar.  Oil, which hit a low in the mid-30's earlier this year, has quietly moved back over $70.                   Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Many commodity charts have a similar bullish pattern as the oil chart, as you can see by the chart of the commodity index called the CRB...                  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk How rising oil and commodity prices, and interest rates, are going to affect the already struggling economy this summer, remains to be seen.  Rising unemployment and rising prices can't be good for the consumer. That's all for today.  Thanks for reading!  Have a great weekend!