Market Talk

[Spaf]

December 19th

The primary movement representing the broad underlying trend of the current market remains bullish. This movement could last from a few months to years. It began August 12th of this year at a bottom lower low of 1060 on the S&P. On October 25th it established a higher low at about 1095, and confirmed the bull movement on November 3rd, by surpassing it's previous peak of 1142. Market conditions continue to favor the stock investments of the C, S, and I funds. Bonds normally lose favor with the rising interest rates.

Last week the S&P closed at 1194, from a high of 1203. The 50 day moving average has retained an upward trend. Oil prices continue to be an uncertain factor, but economic data has been positive.

Seasonality indicators were all green for the last half of the month (on Tom's chart). Hopefully, we will have our end-of-year advance.

Will be going home for Christmas (Tuesday-Monday) and won't have a puter available, maybe next year!

So, here's wishing everyone a Merry Christmas, and plenty of green for the TSP.

Rgds, and be careful!Spafhttp://www.smileys.ws/sm/xmas/00000038.gif

[Dakota]

i AGREE AND MERRY CHRISTMAS MY FRIEND

[SystemTrader]

There's a disturbing trend for stocks right now. As a general rule, when the NASDAQ (NDX) and the Russell 2000 (RUT)outperform larger, more conservative stocks (Dow or S&P 500), it's bullish for the market as a whole. The logic is that when investors are willing to buy more small cap and tech stocks, and thus take on more risk, it's a bullish sign. When there's a "flight to safety" towards blue chips, fear is on the rise.

For much of the fall, the RUT and NDX were outperforming thelarger stocks. Now, at least by themodel I use, both the NDX and RUT are underperforming the S&P 500.A simple look at a chart or table of prices for the last 20-30 days should confirm this.

My model still has me invested100%in stocks, but this movement away from smaller, riskier stocks isn't encouraging.

John

[Spaf]

SystemTrader wrote:
There's a disturbing trend for stocks right now.

After 2000, our world changed, at least we all got a bit closer. The safety of two oceans is no longer there. We are more dependent on other countries i.e., oil. The "disturbing" was always there. It's just a lot closer. Now we have to learn how to deal with it. The ice got a lot thinner after 2000!

Rgds Spaf :?

[Spaf]

Hey Teknobucks........... Those were some great sites for charts and stuff! :^

Take a look at: the web site stocks.com. gallery, and symbol $spx. The link to this site isn't working, so you will have to go manually.
I'm all packed up ready to go home, and here I am fully invested.:'

I need a vacation allocation change so I can sleep at nights. Thanks Tekno, I'll change to G=20, C=30, S=40 and I =10 and let it ride through Christmas.

Got my Honey Baked Ham in the cooler, fishing poles, deer rifle, beer. Yep, I'm all set. Gotta remember to take spouse!

Have a great Christmas everone! My Regards! Spaf http://www.smileys.ws/sm/xmas/00000038.gif

[Mike]

SystemTrader wrote:
There's a disturbing trend for stocks right now. As a general rule, when the NASDAQ (NDX) and the Russell 2000 (RUT)outperform larger, more conservative stocks (Dow or S&P 500), it's bullish for the market as a whole. The logic is that when investors are willing to buy more small cap and tech stocks, and thus take on more risk, it's a bullish sign. When there's a "flight to safety" towards blue chips, fear is on the rise.

For much of the fall, the RUT and NDX were outperforming thelarger stocks. Now, at least by themodel I use, both the NDX and RUT are underperforming the S&P 500.A simple look at a chart or table of prices for the last 20-30 days should confirm this.

My model still has me invested100%in stocks, but this movement away from smaller, riskier stocks isn't encouraging.

John


Small caps lead the early portion of an economic recovery/expansion - probably due to the associated low interest rates and easily attainable loans. As rates rise, financing is more difficult for these companies, and that inevitably leads to blue chips taking over in the later stages of the expansion. I'd say we're closing in on that right now (or maybe we've reached that point already). Prior to yesterday's loss, S was the leader in December by a modest amount over C.

Taking yesterday's gains/losses into account,it's: C up 1.84%, S up 1.76%, I up 1.75% since November 30th... still very close.

[Spaf]

Mike wrote:
Taking yesterday's gains/losses into account,it's: C up 1.84%, S up 1.76%, I up 1.75% since November 30th... still very close.

We play the primary movement. Right now it's bullish. Tomorrow is a different story!

Rgds Spaf :?