TSP Talk - Thrift Savings Plan Strategies

Market Comments

June 3, 2010

Current TSP Share Prices

Today's Commentary (Short Term Outlook)

Bulls' turn

Stocks rallied strongly yesterday as the battle below the 200-day EMA continues. The Dow was up 225-points while most major indices were up between 2% and 3%.

For the TSP, the C-fund gained 2.60%, the S-fund jumped 2.99%, and the I fund was up 2.0%, while the F-fund slipped 0.14%.

The S&P 500 rallied 2.6%, right up to the 200-day EMA again. We have some good setups for a continued rally but overhead resistance continues to loom.

                     Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Like the S&P 500, the Dow is a lagging index. It also rallied right up to the 200-day EMA, but for nearly 2-weeks has not been able to close above it. But if the Dow and S&P 500 are the laggards, what are the leaders doing?


                     Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

They, the Nasdaq and the Dow Transportation Index, have similar chart formations to that of the S&P and Dow, but these two leaders have both moved back above the 200-day EMA, which is a big positive - if they are going to continue to be the leaders.


                     Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk


                     Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

Another indication of how bearish investors have gotten is illustrated by the Rydex Cash Flow Ratio. This shows us the ratio of cash going into bearish funds plus the money going into money market funds, divided by money going into bullish funds. The 1.02 to 1 ratio is the highest (in number, lowest on the chart) it has been since the 2008 bear market.

                     Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

This is another sign that a relief rally is due. Let's see if the market cooperates.

Thanks for reading. We'll see you back here tomorrow.

Tom Crowley

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