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Fund share prices as of: 9/21/07
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Today's Comments (Short Term Outlook)
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Post options expiration
week The stock funds were up modestly across the board on Friday, as was the F-fund after Thursday's big sell-off in bonds. Now we head into one of the worst weeks of the year historically for stocks. Last year, the week following options expiration week (OEW) in September was quite positive with the Dow up about 170 points for the week, but that was bucking the trend. September's post OEW has a poor track record, and the Monday of post OEW is particularly bad when the Friday of OEW is as positive as this past Friday was. When the S&P is up on expiration week Friday as much as we were, the following Monday was positive only 3 of 14 times since the bull market began in the fall of 2002. Let's take a look at the EFA, the EAFE index i-shares fund that we use to watch the TSP I-fund. I don't want to dwell on this to much, but the pattern developing is similar enough to what we saw in the summer of 2006 that it is worth mentioning. Points (A-E) are comparable with point (E) showing sideways to slightly upward action. You will notice that we are now at point (F), which was created by a sharp spike upward followed by a few days of consolidating. If we do see some selling early this week we could end up with a downward move toward a point (G) and the 200-day exponential moving average.  Chart provided courtesy of www.decisionpoint.com The good news is, if the pattern does continue, it sets up another great intermediate-term buying opportunity at that point. The reason I used the I-fund chart and not the S&P was because the S&P doesn't show this comparison quite as clearly as the EFA chart does, and the EbbChart is going to be very active in the I-fund this week. The EbbChart System is in the G-fund today but it will make a move back to the I-fund. The system is up over 26% for the year and is going to try to tack on more as it will be very aggressive all week. Check out the EbbChart page for all of the details. Trader Fred's TSP Trader System is also in the G-fund today. Fred has been monitoring new submodels that are showing some positive activity but again, none of the current active 20 submodels have given a buy signal yet. Read more about it on Fred's system page. The TSP Talk Sentiment Survey system remains on a buy signal and 100% S-fund for this week after the neutral 1.55 to 1 bulls to bears ratio in last week's poll. So, we have some mixed signals but I still can't shake that feeling that something is up. The activity in the dollar, oil, gold and bond yields has been very unusual and I feel like they could be trying to tell us something in the short-term. I would actually be surprised if this week goes by without some sort of economic, geo-political, or even a natural event. I guess we'll have to see how the week plays out. That's all for today. I am currently 100% G-fund. See you tomorrow. Have questions? Visit our message board for answers.
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