Market Talk

[Spaf]

Market Movement


There are three types of market movements: a. Primary (month to years) called bull or bear markets. b. Secondary reactionary movements (weeks to months) and they move counter to the primary trend (bull markets=corrections, bear markets= rallies). and c. Daily fluctuations (hours, days or a week) and can move with or against the primary trend.
Sucess as I am told is to identify the primary trend and stay with it.

The 2003/4 bull market ended on March 5th at (using the S&P 500) 1163.23. Since then we have been in a bear market. On August 13th we recorded a lowest low of 1060.72.On October 7th we recorded a high of 1142.05. On October 25th we recorded a higher low of 1090.19. September 22nd to date has recorded market volatility that has clouded the issue. The issue is that October 29th ended at 1130.20 or 11.85 points below the previous high, or 11.85 points of what could be a bull market.

The market is moving, the presidential factor needs a closure. last weeek oil prices were at $51.78. Earnings so far were OK, with the majority above expectations.

So, we stand at the crossroads, and I will invest in what is conservatively optimistic. I will bet on the bulls, but stand clear of an outright claw by by bears (50% G fund - 50% CSI) and a quick transfer eather way.

Attachment chart. Be careful! :) Spaf

[Mike]

Spaf, I heard reports that after-hours trading brought more gains in the market even after the bin Laden tape surfaced. Could this be the market saying "bin Laden lipping off = Bush re-election bid strengthened"? I think so.

Barring some major incident between now and the election, I don't expect much action in the market on Monday or Tuesday.Wednesday through Friday will decide our fates. Down = failure to break out of this sideways action that has frustrated us for months. Up = the long-awaited bull market. I'm betting on green. Others bailed last week and locked in their gains (they are probably the smart ones, but we'll just see about that - I've netted tiny gains since they left the market for G, so maybe that's an omen).

That's just my opinion - take it for the two cents that it's worth. :cool:

[Spaf]

Mike - We are in a stage of careful analysis (the crossroad). Question: Are we in the quiet period, before an advance, to surpass the previous peak (1042), and confirm a bull? I don't have a good answer. We will just have to wait and see.

[smedlap]

Spaf and Mike, nice to see your Sunday comments. Back from Phoenix to the Canadian border, slight tempreture change:shock:. Have to watch that heating oil price. For me so far, it has been a good year with TSP as I bet early on the dollar decline. That will change now. I've also beenwatching the impact of oil and projections are for oil to drop over the next 2 months to $40 plus a barrel, the ellimination or releaf of the surcharge on the consumer. Europe and Asia economies cannot withstand $55 a barrel. Now this soon $40 a barrelis a temporary 6 month price as we will be challenged again next summer and there on out. But what this means is good TSP returns premised upon sage analysis.This coupled with best 3 traditional market months ahead and a very sound industrial sector, abet limited hiring means I think positive effects. The election is interesting. I'll keep my vote to myself and just talk about Congress. Kerry wins, it is gridlock because the Republicans control the House and Senate. Bush wins, I project he pulls inunabeted spending because he has been so shamed. But he did create economic growth with AGreenspan's help. Best to study 10% unemployment in Europe, poor economic growth if one want's to talk about making a little less.

An earlier poster wrote - what a great country.:^ You better believe it. How would you like beheadings in our country by hidden terrorist or trying to invest inthe free Iranian stock market as a citizen. Don't be illusionedabout where and what soil the terrorist fight needs to be foughton. I also believe the future demand for oil will alter the world's consumer's spending habits, thus alter the traditional way we reactto resessions, predict business cycles and incur consumer debtwhich drives the market.

I project good stock market times for the next three months and think it best to have stayed in the market during these 2 voting days. We'll see as I am 100% S also as TSP Lead and agree with his logic. But best play is for all to vote regardless on Tuesday. In some countries they sadly lose their heads forsuch. :dah:And if you think it be for oil and they shouldn't be there- how about enduring European prices of better than $6 a gallon which would be $12 with IRAQ collaberation with Iran. We'd have a lot of chinco-chentos (500cc Fiats) on the road instead of all those 4by4s in Phoenix!

[tsptalk]

FWIW, the 1st trading day in November is historically very strong. The strongest as far as average return goes (+.50%) and the 9th strongest of the year as far as being up 69% of the time.

The 3rdtrading day in November is up 70% of the time averaging (+.30%).

[Spaf]

Thanks Tom - I'll put in a transfer to 70S and 30C for Monday, with cancellation or change depending on the AM indications.
smedlap - I started a thread of market talk on Sunday to try and give members as much of advance talk as possible. The TSP transfer time gap is a problem of sorts, compared to real time trades.
If we had a bull market then all of our talk could be very different.I'm a novice to the market, a government employee, but I'll fight back to a system that leaves our retirement up to harem scarem.

Another thing: "Catch up Contributions for TSP"
This could be good or bad, depending on where youare in retirement and your finances. This is something that has to be figured on each persons goals, time frame,and portfolio. Blindly, don't take this plunge, until You do the figures!

[Mike]

Tom, how does that seasonality change for presidential election years?

[tsptalk]

Mike wrote:
Tom, how does that seasonality change for presidential election years?
I don't know on a day by day basis, but the election day average chart looks good also. You can see itat the bottom of www.tsptalk.com/comments.html (http://www.tsptalk.com/comments.html).

[tsptalk]

CNBC just put up a stat, and I don't know if this is an average or prediction...

If Bush wins expect the Dow to be up 1% Wednesday

If Kerry wins, expect it to be down 1%

If there is no winner yet, expect a 2% drop.

Hmmm.

[Rod]

tsptalk wrote:
CNBC just put up a stat, and I don't know if this is an average or prediction...

If Bush wins expect the Dow to be up 1% Wednesday

If Kerry wins, expect it to be down 1%

If there is no winner yet, expect a 2% drop.

Hmmm.

I expect no clear winner come Wednesday.

[Paul]

A Stratfor Inc. Market Brief. This one is about the Dollar.

Paul

[smine]

waited til today to move to G. looks like S gained .03, C nothing I .01. So I got away with last weeks gains including Friday and today before bailing! I'm happy....:)Will see what Tuesday brings but.....I'm happy...

[Spaf]

Monday, the day before the election. Market gains were modest.

Rod was right in his last post. Market news was quoted as "The buying seen off this news did not last through the rest of the session as buyers remain troubled by tomorrow's Presidential election... Concerns that the victor would not be decided tomorrow night - with 2000's race in mind".

My Bear/Bull meter was at: Bears 1060....|....|....|.^.1140 Bulls.The Bull market is close, but still not there. If it advances through 1042 (the previous high)we should have it.

Toms reference to CNBC has some good market info. So I'll list it for reference:
http://news.moneycentral.msn.com/briefings/StockTicker.asp

Be Careful! :) Spaf

[Mike]

The market did what I expected! I can't believe it. :D

[coolhand]

Tom - Agree wholeheartedly with your comments today. Anything can happen. Trying to have it both ways by staying 35% C and 65% G. Oil is giving the market some measure of boost in the face of election uncertainty. What a ride!!

In the short time I've been monitoring and posting to this board I've learned quite a bit. Thanks to all who provide input. It keeps me thinking. :^

[Spaf]

While the probability of an election tie, always exists, and uncertainity of a winner, like 2000 is always a possibility. I think this scare has been inflated. States should have taken strides to improve voting devices. The election may be close. But I think we will see a definite weiner amoung the two canidates.

[puertorico]

1-Bush winner = rally
2-Kerry Winner = rally
3-too tie and go to electoral vote"court" "not a winneryet= down

My number say 2 to 1 in favor of a rally,I'LLTAKE IT:D

I'WANT TO ROCK THE RALLY,ALL OR NOTHING ... :D

Rally either way, nice article.

Election rally coming?

http://money.cnn.com/2004/11/02/commentary/column_hays/hays/index.htm (http://money.cnn.com/2004/11/02/commentary/column_hays/hays/index.htm)

[Rod]

retire rich wrote:
Rally either way, nice article.

Election rally coming?

http://money.cnn.com/2004/11/02/commentary/column_hays/hays/index.htm (http://money.cnn.com/2004/11/02/commentary/column_hays/hays/index.htm)

Doubtfully.

[tsptalk]

coolhand wrote:
In the short time I've been monitoring and posting to this board I've learned quite a bit. Thanks to all who provide input. It keeps me thinking. :^

Good to hear coolhand. Thanks for the feedback!

[coolhand]

Spaf wrote:
While the probability of an election tie, always exists, and uncertainity of a winner, like 2000 is always a possibility. I think this scare has been inflated. States should have taken strides to improve voting devices. The election may be close. But I think we will see a definite weiner amoung the two canidates.
Point taken. Since I am from Florida (I'm thinking this makes me an expert in what can go wrong in voting ;)) I can tell you that we are still not without our voting problems. We have multiple voting mechanisms in place in different counties and glitches and recounts are already occuring. I also saw an article posted, I think on Fox news, this morning that listed all the problems various states were having. I was amazed at the extent of issues still occuring. in many, many states.In fact, Colorado may be delayed in reporting their results for days or even weeks according to the acticle.

Icannotpredict what will happen.But in measuring the risk associated with making a call on this election I opted to play both sides. It is, as you know, a day-to-day call. I wanted to be positioned to take advantage of any outcome.

I believe, as manydo, there will be rally at some point after the election. It could be hours from now or weeks. I hope it's sooner rather than later. I'm dying to get fully invested again in stocks.

I appreciate your comments and charts. They have helped me out quite a bit.

[clester]

I believe the I fund gives you market exposure and is somewhat insulated from the election results. The returns have been great, but I expected at least a short term technical pullback. I think its coming , but when?

I also think the scare over the election is overblown. The economy, earnings, oil under $50, etc will cause the market to rally. I was worried about a terrorist attack and that didn't happen. My opinion is we're going to break out of this trading range soon and good returns for a while.

I hope!

[coolhand]

I have yet to see anynews from any media outlet that this election is anything but tight at the moment. Including Fox.The fact that so many lawyers are involved just makes me that much more cautious. The market is saying the same thing. This afternoon, as soon as the first exit polls came out, the market gave up its gains in short order. Yeah, I would say that collectively the market is worried. I've looked at this decision sort of like a call on a roulette wheel. Red or black. Take your pick. I haven't been able to find a hint of direction.

I was invested in the "I" fund until early October. I am surprised to some extent atits recent gains. I have not been able to decide of late whether its a good place to be or not. Our weak dollar policy has helped to keep it moving upward along with Asia's willingness to accomodate our appetite for national debt as they are pegged to our dollar. I need to look at this a little deeper. This is a complicated market. Anyone else have any thoughts in this area?

While oil has seen a decline of up to 9% in the last couple weeks or so it is still in short supply and continues to be highly volatile in my opinion. I agree that any downward trend will have a positive impact on the market, but anything can happen in the short term.Check outCapital Spectator online for some real thought provokinganalysisin this area.

Terrorist attacks should always be a concern, but we haven't really had any since 2001.Its been threeyears. Seems tome we must havedone something rightto combat that threat. I would never make the mistake of underestimatingthe potential, but we have a trendthat indicates the threat has been mitigated.

I expect to jump back in (fully) to equities any day now as I do expect a rally regardless of who is elected (although the market may hesitate if Kerry is elected). I am less optimistic about 2005, but well just have to see how things unfold.

[tsptalk]

clester wrote:
I was worried about a terrorist attack and that didn't happen.
That is a good point. There was a little election terrorist threat built into the price of stocks. Now that we have gotten past the election without an event,we may get a relief rally.

[Dakota]

admin, What about the I fund do you think it will continue to fly

[Spaf]

The I fund was tops in October! Will be tweeking my transfer allocation to 35-C, 50-S, and 15-I effective 11-3.

Double checked the tech analysis for the C-S-I funds. The MA and P-SAR indicated ok to go long with the funds. Stats ok for now!

[tsptalk]

Dakota wrote:
admin, What about the I fund do you think it will continue to fly
The international marketsdon't really have any advantage over U.S. markets in my opinion right now. It's the U.S. dollar that will determine whether or not to play the I fund.The support has held lately on the dollar but who knows for how long.

It has been a good fund and I used to say "don't forget that I fund" but lately I have because of the dollar falling so much, so fast. So in the short term, if you think the dollar will go lower, play the I fund. If you think it will rebound, stay out.

http://www.tsptalk.com/images/dollar_11_3.png
Chart courtesy of http://www.decisionpoint.com (http://www.decisionpoint.com)

[Spaf]

Wednesday 11:30

The market looks like it will retain the bull, if S&P will advance through 1142, that figure or there about will confirm the bull market.
The new market if true may not be the same as 2003, it may have slower growth but never the less be a bull market. I see it as lasting until late January, and then we will need to re-evaluate conditions.
Its about time to change over terms. In bear markets we had declines and rallys. In bull markets we have advances and corrections. I'm superstitous about using words that can spook the market. But I sometimes use words like winners and weiners interchanceable for humor.
We have 5 TSP funds:
G fund = granny.
F fund = funkey
C fund = chad
S fund = super
I fund = ? What do we name the I fund. Any suggestions?
Does anyone have a different name for the funds?

Its time I think to come up with some fund allocations for a bull market with slower growth: How about G = 35%, S = 50%, and I = 15%for starters??????

[JerBer]

How about "inconsistent" for the I fund? You can lose money even when the fund has made a gain... it's happened to me a few times!

JerBer

[Spaf]

I like that! :D

Call me crazy or zany, but I prpbably did the unthinkable.......I cashed in my S fund(changedbefore 12 noon, 3 Nov 04)"chips" and stashed the proceeds into the G fund. Of course after this brief period unconsciousness, I plan to get back in te market...honest.

Although I have doubts about this "relief rally". And when/if there is a dip in the next couple of days or so...I will be there. Assuming profit taking or ome other mystical action tomorrow causing a down tick inthe market may be the widow of opportunity for me. For now I will be happy with the fruits of my labor...and just wait patiently for the next "big" thing.

[Spaf]

RR - Good evening!


Today the S&P closed out at 1143.20. This was 1.15 points higher than the previous high of 1142.05.
By the Dow Theory: We have ourselves another Bull market! :^


DT "When the previous peak is surpassed, the beginning of the second leg and a primary bull will be confirmed. The second stage of a primary bull market is usually the longest, and sees the longest advances in prices."

The Bull market started On August 13, 2004 at the lower low of 1060.72.

Naturally there will be some pull backs (corrections). DJTA (transportations) were up today (a good indication). There is not widespread belief that we are in a bull market. Most of the media and market talk is about rallys and bearish phrases. Oil closed at $50.88 and indicated that it will be a future problem until nations can get a cushion and controlled production.

Now is the time to be thinking and talking about allocations between thestock funds F - C - S - I.

I'll repeat myself with my current allocation of 35C, 50S, 15I. And ask the question of why not? Some of the members here are good with the math and numbers! So let us know about allocations between funds?

Rgds :! Spaf

[Spaf]

My S&P Bear/Bull meter:

Bears 1060....|....|(1100)|....|....|1140 Bulls *

11/03 Market close 1143.20 *= Bull :^

[Mike]

I'm hoping for a correction soon so I can buy back in and not get totally hosed on higher prices.

[Spaf]

Mike - In a bull market the prices are always higher! The question is not to believe what I'm talking about, It's what the the market is saying! This is your delima. I only report the facts as I see them, the best I can. The rest is up to you!
My stats indicate a bull market now. The sentiment is bearish, and I expect it during this phase of the advance. Is the advance real? I think itis, based on "The Dow Theory". Could I be wrong? Yes. What else could I consider?


The delima? I'm not a market guru!



Be careful! :) Spaf

[Spaf]

CAUTION!

When talking or listening to "members" on this board, please be careful! Some have different agendas, some are new, some old,and some whatever? Most ofus are government employees, doing our best each day, and not market gurus.
Consider what is said, and, with a grain of salt?
I love talking with you guys, yet we best be careful, even with each other!

Rgrds ;) Spaf

[Rod]

Spaf wrote:
CAUTION!

When talking or listening to "members" on this board, please be careful! Some have different agendas, some are new, some old,and some whatever? Most ofus are government employees, doing our best each day, and not market gurus.

Exactly! That's why I have the disclaimer I do in my account & account talk.:D

[TheProphet]

I AM CERTAIN I WILL BE THE S&P ON THE 1200PERHAPS PLUS LEVELS NOW...

I AM 100 % S !!!

[Dakota]

lkatteng wrote:
I AM CERTAIN I WILL SEE THE S&P AT 1200 PERHAPS PLUS LEVELS NOW...

I AM 100 % S !!!
I'm with you after today, I kind of spread it today 33s33c34I :^ Good luck I think I'm finally understanding some of the lingo and what higher highs and higher lows. tthere's a lot more understanding I've kinda caught hold of charts and such. Thanks as we say down here (ALL YA"LL)

[Spaf]

Hey - Rod, LK, Dakota
You guys are gonna need a big bag for all that green stuff!

[Rod]

Spaf wrote:
Hey - Rod, LK, Dakota
You guys are gonna need a big bag for all that green stuff!
:l:!:l

It's nice to see!!!:^

[Spaf]

OK..... we have had a good week..... so far.:)

In the start of the 2003 Bull, in the first week the S&P shot up about 60 points and then corrected (declined) about 50% during the second week, before resuming the advance withgenerally smaller declines as the advance continued.

So far this Bull has shot up about 66 points in the S&P. The decline could come tomorrow, Monday, or just any day now. It has to slow down soon.

Choices: a. Hold...Ride through it, and come out the other side (maybe).
b. Transfer to the G fund Friday, and hope it will come early next week.
c. Transfer when ever it appears (with 1-2 day loss).

--------- ???????-------

[Mike]

I have to buy in on the correction, unless I feel like losing money on the next move (which I don't). Even in bull markets, the market doesn't go up every day. So, I play the waiting game.

[FundSurfer]

Spaf, my plan will be to watch for a couple lateral or down days in a row, then bail to G.

[Spaf]

FS - The market has been reacting fast and furious. A few laterals and a steady decline, Yea we can shift over. It's this 1-2 day transfer time thats against us, with big daily movements. I think I will play the AM market to watch for a correction (decline), if I miss it, well I'll just ride through it. If I try and guess it, well thats gambling, and I'd probably miss the biggest advance in market history.

[Spaf]

Attached is the S&P 500 chart for November 4, 2004.

Closing today the S&P recorded an advance to 1161.67. The previous high was 1142.05. This is The Dow Theory confirmation of a new Bull market.

[Dakota]

Spaf wrote:
Hey - Rod, LK, Dakota
You guys are gonna need a big bag for all that green stuff!


Thanks spaf

[Spaf]

Hey Dakota :^ I think we are headed for some green pastures, so maybe we should be talking about allocation of funds, to sort of tweek accounts. I'm not to sure about the I fund? The C and S funds seem to be the best for the long run. How do you feel about it?

[Mike]

The dollar just made a 9 year low. If that continues, the I fund will continue to climb.

C and S are cheaper though, so those are the funds to attack I think.

It's painful seeing all this green and not being in, but I have to be patient and wait for the correction. If I buy on emotion, I'll get burned.

[Dakota]

Spaf wrote:
Hey Dakota :^ I think we are headed for some green pastures, so maybe we should be talking about allocation of funds, to sort of tweek accounts. I'm not to sure about the I fund? The C and S funds seem to be the best for the long run. How do you feel about it?


Well the I fund gives better return percentage wise, I do look for a drawback its been hot latelyand a little higher than it has ever been, but we saw that with the others. I'll play the I fund about 25- 30%until I see it loose the first time and then I'm bailing to g,c,s untillI get some kind of sign. Currently 33c 34s 33I

[Spaf]

Dakota - See yah!
Mike - This is a Bull! Don't let it pass you by!
Careful my friends! :u Spaf

[Mike]

I know it's a bull, spaf. I'm saying that since I missed the initial big gains, I'm probably better off waiting for the inevitable correction to make my move back into stocks.

[Spaf]

Bull market allocations

Light - vs - Aggressive.

My 2 cents: The Bull market we have appears to be very aggressive in respect to past week advances. I think any corrections (declines) will be a match in spirit.

1st: Consider the amount of $ you are investing (risking) outside of G and F.
2nd: Consider the allocations between funds.

The first correction (decline) of the new Bull should be the biggest, based on the 2003 Bull.

My at risk max. for aggressive = 100% stocks.
light = 50% US +10% Intnl, stocks.

I just remembered, :i I met my goals for this year. Why risk it, if not necessary!



Therefore I will be changing allocations effective Friday COB for:
25% G....20% F....25% C....25% S....5% I



Careful out there! :)

[tsptalk]

Mike wrote:
I know it's a bull, spaf. I'm saying that since I missed the initial big gains, I'm probably better off waiting for the inevitable correction to make my move back into stocks.
Mike -
From experience, the market tends to come down right after you can't stand the pain of being on the sidelines anymore. So, either get in now, or fight that that urge when it comes.

[Mike]

Yep Tom, that's what I've been thinking all week. I've been cursing a blue streak at myself every time I see all the green on the tickers - but my mind is screaming at me "the best things come to those who wait" - and so that's exactly what I'm doing (as illustrated by the tumbleweeds blowing through my account transactions page since Tuesday :P).

As soon as I see the stock funds fall about halfway back to where they were on Tuesday, that's when I'll pull the trigger - but not one moment sooner. Notice that Spaf is trying to entice me with his bull market siren song... bad Spaf, bad! :D