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Buy low, sell high
Big early gains in the market yesterday vanished by the afternoon,
but a late push allowed the major indices to close modestly higher.
The I-fund outperformed as the dollar pulled back.
The S&P 500 remains is a trading range so we should probably be
thinking that way also - i.e. trading. As long as the upper
resistance and lower support are holding, we may be able to make
some money buying low, and selling high. What a concept.
Chart provided
courtesy of
www.decisionpoint.com,
analysis by TSP Talk
That's easier said than done, but we
have learned that buy and hold is not the way to make money in this
market. And sitting in the G-fund with a yields of less than
4%, isn't going to grow our nest eggs nearly enough to support us
during retirement. I believe we, particularly anyone looking
to retire in 10 or 15 years (but not those getting ready to retire)
need to take some chances when opportunities knock.
Unfortunately, opportunities have been few and far between lately,
and right now with the S&P 500 stuck in the middle of a trading
range, the risk may be a little high. That said, this week
does
have that strong end of January seasonality that we talked
about yesterday.
Bonds have pulled back from their late 2008 parabolic rise, and seem
to have made a lower low. Two gaps created during the rally
have been filled on the way down, but there are 2 more that need
filled.
Chart provided
courtesy of
www.decisionpoint.com,
analysis by TSP Talk
The September peak lines up with the largest gap just under 120, and
could be a target area for the pullback / correction for the 30-year
bond. This does not match our F-fund exactly, but watching
bond prices and bond yields will give us an idea of what might be in
store for the F-fund.
Earnings are obviously coming in quite low compared to last year,
although some are meeting and beating estimates. We could be
seeing a little optimism when things aren't as bad as predicted, no
matter how low the expectations were. For instance, Texas
Instruments reported 4th quarter earnings after the bell yesterday,
which were 86% below the prior year's numbers, yet the stock was up
5% in after hours trading.
The bear market is in full force but we can still look for
opportunities. The end of January can be strong but any buying
based on that may have to be short-lived as February is
one of the worst months of the year historically.
Update: 10:30 AM ET. I forgot to mention the FOMC meeting
today and tomorrow, with the Fed releasing their policy statement
tomorrow at 2:15 PM ET. That may affect your decisions to act.
That's all for today. Thanks for reading. See you
tomorrow!
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