Market Comments

September 12, 2007


Fund share prices as of: 9/11/07
Fund - G Fund F Fund C Fund S Fund I Fund
12.11 11.61 16.49 19.78 23.72
$  Change - +0.00 -0.03 +0.22 +0.25 +0.34
% Change - +0.00% -0.26% +1.35% +1.28% +1.45%
  L2040 L2030 L2020 L2010 L Income
17.93 17.12 16.37 15.20 13.27
$  Change - +0.20 +0.17 +0.13 +0.08 +0.03
% Change - +1.13% +1.00% +0.80% +0.53% +0.23%



Today's Comments (Short Term Outlook)                             Printer friendly
Pre-Fed rally

Stocks rallied as the market continues to chop up and down on low volume as we head into next week's FOMC meeting.  The S&P 500 seems to be in a 1440 to 1490 trading range. 

Right now the S&P 500 is right in the middle of that range and we could go either way.  One positive is what appears to be a possible higher low developing after a higher high was made last week.  For the higher low to be "official", we'd want to see another new high made over 1490. 


                                  Chart provided courtesy of www.decisionpoint.com

If the chop continues we should see some selling at least one more day this week.  The smart money indicator, the 10-day moving average of the OEX put/call ratio, saw a sharp increase in put buying yesterday.  This is a very short-term indicator that could be telling us that today or tomorrow could be that day of selling.


                                 Chart provided courtesy of www.decisionpoint.com

This upcoming FOMC meeting is so important to the stock and bond markets, but it can be tricky.  If we continue to rally leading up to Tuesday's meeting, we could see a "sell the news" reaction, even if they do cut interest rates.  If the Fed cuts 25 basis point (1/4%), it could be a disappointment.  If the Fed cuts 50 basis points (1/2%) the market could get excited and rally, or it could take it as a sign that the credit crunch may be worse than we think.  If they don't cut at all for some reason, who knows how investors will react.  It could get ugly, or investors could take it as a positive that a cut is not needed.

So, I suspect volume will continue to stay on the light side and if we want any clues as to what the Fed might do, we may want to pay close attention to those smart money indicators for the next few days.

The EbbChart System is in the I-fund today but is backing out to the F-fund again for tomorrow.  I'll let ebbnflow explain his strategy on the EbbChart page.

Trader Fred's TSP Trader System is in the F-fund today and the system received two more F-fund submodel buy signals after the close on Monday.  The system is still void of any positive signals for the stock funds.  Read more on the system page.

If we can manage a gain this morning, I may take our modest gains for the week and heed the sell signals of those two systems and move into the F-fund.  I'll play it by ear if the market is down this morning.

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

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