Market Comments

September 11, 2007


Fund share prices as of: 9/10/07
Fund - G Fund F Fund C Fund S Fund I Fund
12.11 11.64 16.27 19.53 23.38
$  Change - +0.00 +0.03 -0.02 -0.15 -0.23
% Change - +0.00% +0.26% -0.12% -0.76% -0.97%
  L2040 L2030 L2020 L2010 L Income
17.73 16.95 16.24 15.12 13.24
$  Change - -0.07 -0.06 -0.04 -0.02 +0.00
% Change - -0.39% -0.35% -0.25% -0.13% +0.00%



Today's Comments (Short Term Outlook)                             Printer friendly
Bounce doesn't take

A wild day for stocks on Monday as we saw a little of everything.  The morning 90-point rally was sold, which led to a late morning 180 point decline that was then bought, and another 190 point rally to the upside was sold again leaving the Dow nearly unchanged on the day.

         

That's not exactly the type of bounce you like to see after a 250-point decline the Friday before, but investors are still trying to weigh the pros and cons of the recent economic data.  That is, we are seeing signs of an economic slowdown, but it now forces the Fed to make a move to cut rates.  We needed bad news to stimulate a possible positive action.  But if the Fed does not cut rates... not good.

The S&P 500 made a lower high and a lower high yesterday which is technically not great, but it did manage to close above the 200-day EMA again.


                                   Charts provided courtesy of www.decisionpoint.com

SentimenTrader.com gives us some background on prior instances where we market declined over 1% on the day of a jobs report.

This was be the tenth time in the past five years that the S&P has lost more than 1% the day of a jobs report.  The short-term reaction after that was mixed, but a week later the index was up 7 of the 9 other times with an average return of +1.2%.  That's a bit more notable than usual since 4 of them occurred during the bear market.  The weeks tended to be fairly volatile, though, with an average drawdown of -2.0% compared to an average maximum gain of +2.7%.  Not a huge positive edge there.

The indicators are slightly oversold but no real extremes at the moment.  I suspect we will see choppy action up until the September 18th FOMC meeting.  Fed Chairman Ben Bernanke will speak in Germany today about recent developments in the global financial system. That could cause a little shakeup. 

The EbbChart System is in the I-fund today.  See what ebbnflow has to say about the rest of the week on the EbbChart page.

Trader Fred's TSP Trader System is in the F-fund today and the system actually received two more F-fund submodel buy signals after the close yesterday.  Fred is moving the stop loss up for this trade to ensure a profit.  Read more on the system page.

 That's all for today.  I am 25% C, 50% S and 25% I-fund - but that could change any day this week.  See you back here tomorrow.

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