Interfund Transfer 1/07 for 1/10/05

[tsptalk]

I am making an interfund transfer Friday morning which will take effect Monday morning. The new allocation will be 50% C, 25% S and 25% I fund.

A change in investor sentimentis the main reason. For more info, please take a look at today's market comments (http://www.tsptalk.com/comments.html) / (http://www.tsptalk.com/comments_archive/comments_1_7_05.html) for more details.

One more flat to down day would be nice today.Hold the "potential" rally until next week. :)

Thanks,
Tom

[Rod]

tsptalk wrote:
One more flat to down day would be nice today.Hold the "potential" rally until next week. :)




No it wouldn't, because I'm 100(S)!:P

;)

Tom,

It will be interesting to see how the market is affected by the jobs report. My guess is that it will be a disappointing figure but that the market still won't be hit that hard by the news as the disappointment is, to some extent, alreadyin the market. However, it could negatively affect the dollar today, which has been quite bullish short term.

I still disagree with your emphasis on C over S for January...and at least yesterday's resultsbear this out.However, I'm remaining 100% I for now. If the dollar mini-rally continues next week, I'll move to 50% I 50% S. IMHO, starting in March we should begin to see the C fund move ahead of the S and remain ahead thru the year. However, I still feel that, long term, the dollar remains ina bear market. That translates into the I fund continuing tooutperform either the C or Sfund thisyear (assuming, of course, that we don't fall back into a worldwide bear market).

[tsptalk]

The jobs report is tricky. It can't be too good or too bad. If jobs rise too fast, the Fed will need to raise ineterest rates faster. If too slow, then the economy appears to be slowing.

Looks like we got a mixed bag. Jobs were lower than estimated by about 18,000 but they revisedNovember's numbers higher by 25,000.

[ou81200]

Tom---

Are you concerned about the way the dollar has done lately? I would think the I fund would not be safe right now.



Comments?

[tsptalk]

The dollar hashad a pretty good bounce and may come down a bit. I'm not too worried about it flying away. I don't mind risking 25% of my account in the I fund right now with it being down 2.5% in the last few days.

[neirbod]

The dollar fell slightly against the euro immediately after the job report. Could be that the job report was ideal for those invested both in domestic and foreign stocks. It was strong enough to lift the C and S funds (at least for now), but weak enough that the dollar is sliding.

[Mike]

Well, that report didn't do much either way -too small a job increase tocreate inflation fears, too large to be a major disappointment (especially with upward revisions in previous months).

Guess it's just time to sit tight and see what happens.

[neirbod]

Well, I take back what I said earlier. Looks like the jobs report was just good enough to rally the dollar but weak enough not to spark a rally. Boy, I am just batting 0.000 so far this year.:(

Can't we just forget the past few days and start 2005 next week?

[Wheels]

Amen to that brother.

Dave

[LIG]

Well Tom, I didn't follow you into G earlier this week...bad move on my part:'. Instead, I moved from 50% C, 50 % S; to 100% C . I see you're moving out again.

I read a few days back that that some in the group feel thatthe 2004 steam will likely leak fromthe S andthatthe C will dominate this year. Did I understand that correctly? Any thoughts in that area?

[cowboy]

Come on roll an I! I fund down all week hoping Monday or Tuesday I performs and goes up! I have done okay so far this year as I side stepped a big down market by being F coming out ofthe New Year.The market can be very humbling when you see all of your December gains disappear. :(

[ou81200]

FWIW---

I went from 50% C, 50% S to 100% G to be effective Monday. Thought I would get that one penny from the G fund before deciding where to put the money for next week.

This week has been interesting to say the least.

[pyriel]

cowboy wrote:
Come on roll an I! I fund down all week hoping Monday or Tuesday I performs and goes up! I have done okay so far this year as I side stepped a big down market by being F coming out ofthe New Year.The market can be very humbling when you see all of your December gains disappear. :(I hope you are right Cowboy. I sure didn't go 100I just so I can score a date with Saraho. :D

[Skip]

I still don't see any strength lower lows in c and f and a lower high in the I fund....

I'm still 100%G Until I see something positive....

Skip

[tsptalk]

LIG wrote:
I read a few days back that that some in the group feel thatthe 2004 steam will likely leak fromthe S andthatthe C will dominate this year. Did I understand that correctly? Any thoughts in that area?

That is correct. I'm thinking we will start seeing, and we have seen that this year already, a rotation to the larger caps. It could take months to fully happen, but the rising interest rates will eventuallyturn folks away from the smaller companies and into the more stable larger ones.

[coolhand]

tsptalk wrote:
One more flat to down day would be nice today.Hold the "potential" rally until next week. :)




That's what I'm hoping. Great comments this morning Tom. The puzzle pieces are slowing coming together! :D

[teknobucks]

hope we pop out of this darn rutsoon....

http://tinyurl.com/656r5





semis had a bit of strenght today....usually lead the naz

http://finance.yahoo.com/q?s=SMH

[tsptalk]

coolhand wrote:
Great comments this morning Tom. The puzzle pieces are slowing coming together! :D

Thanks. I sure hope so.

[Mike]

pyriel wrote:
cowboy wrote:
Come on roll an I! I fund down all week hoping Monday or Tuesday I performs and goes up! I have done okay so far this year as I side stepped a big down market by being F coming out ofthe New Year.The market can be very humbling when you see all of your December gains disappear. :(I hope you are right Cowboy. I sure didn't go 100I just so I can score a date with Saraho. :D
I'd go 100I to score a date with her. :^

[HAMMERTIME]

I am a new member as of today. I have been worried about the last couple of days having 70%money in the S fund and 30% in the G fund. I haveonly beencontibuting to the TSP for about ayear and a half and don't have much money in as of right now. I will take moderate risks and am not sure what fund to put money into. any advice? Thanks

[tsptalk]

Welcome Hammertime! That is a big question that won't have a simple answer. My advice right now is to use the menu at the top of the page to take a look around the site. There is all sort of info regarding allocation, short term investing, long term investing, aggressive, conservative, not to mention the many strategies I and others here use.

Come back and let us know what you think, and maybe you will have a better idea where you want to head with your investing strategy.

Thanks for joining us!
Tom

I'm still 100% I. (You too, Mike? *LOL*)If the dollar index strengthens past 83.8, then I'll go 50%S and 50%I near term. Notice that on weak days (which have been most days in January thus far) the S fund has been hit hardest and on strong days the S fund leads. To me, staying in the I fund is a form of hedge as it is essentially similar toholding an international C fund (a combo C and dollar play). I still think the S fund has some legs in January altho each time interest rates rise, the funds take a hit. I expect to become far more defensive in February, moving some funds into G. (February is traditionally a poor month for stocks...over the past 55 yrs, if you held the C fund only in the month of Feb, you'd be down 3.3%)

Looking further ahead in my crystal ball, March should be anup month for a few reasons. It closed down last year by almost 2%. The past 10 times that March closed down, it closed up in the following year (C fund). It's also traditionally a bullish month...

[Mike]

Actually, I'm 35C 30S 35I.

But if I had to go 100I to score a date with ya, I would do it (I'm that much of a sucker for pretty women). :D

[Lobo]

Hey Folks....I got a simple question. You know I hardly ever "say" anything, come to this great site only occasionally, read most of the posts that are recent, and love hearing all the input. I've been doing this almost a year now, and due to very poor judgement on my part and a "slow learning" curve...still not sure where that curve is going LOL...I've lost money. I know it's my own fault, cause lots of you are making money. Well, actually, I lost money the first 3/4 of last year, and have gained a good bit back since then. Except, I've been 20C 60S 20I for about 4 weeks without a change, and, of course, have lost the December gains I found somewhere back there.

Anyway, the simple (and probably dumb) question is this: When I go to the Yahoo charts for the funds and put in a 3 or 6 month chart with a 20-day moving average, it looks "easy" to see where one should have bought and sold. Would it not work to my advantage to watch this closely day by day and sell a day or two after the chart falls below the ma line and buy a day or two after is rises abouve the ma line? I'm sure there is some reason that it isn't that easy, or everyone would be doing it. Maybe the 20-day average doesn't "catch up" to the current info since it has no data for the future to give an accurate average for this day?

Well, anyway, just a thought and I would appreciate any input on it to help educate this ole hillbilly.

Thanks Tom, for all your dedication and effort to help folks like you do by having this site. It's more apprecitated than you really know, I'm sure!

Lobo :)

[ou81200]

Lobo---

I'm not market savy, but I know a few things. There's lots of good info on this board. Tom does a great job (Thanks Tom) and for the most part, I follow his lead.

Today, I'm 100% G. However, I put in an order to be 50%C and 50%S effective tomorrow. I did this because Intel is suppose to be putting some numbers out today after the close. IMO, this will dictate how the market will play tomorrow. Also I believe that therecould be some kindof rebounddue to the hit the marketis takingtoday. Call it a dead kitty bounce:shock:.

This move I'm making will be a very short move. I will likely move back into the G fund ifI make any gains tomorrow. IMO, the market is lacking direction right now. I lack the intestinal fortitude as some of theplayers here. I'm still learning.

[Spaf]

Lobo

See this site: http://www.incrediblecharts.com/technical/moving_average.htm

Moving averages work good when you have cycles, as in some bearish markets. In Bull markets thay can confirm the trend. Soften out peaks and valleys. Anyway the folks at incrediblecharts have a lot of information about what you were asking.

Rgds :) Spaf

[Rolo]

You have a good point there, Lobo, and I use MA's to see where the TREND is going.

The tricky part about applying it to the TSP is the fact that your IFT request one morning won't take effect for two days. Then, you have to anticipate two days in advance when to get back in. Personally, I can easily find myself selling low and buying back high with the lag.

I think thereis money to be made byapplying that MA logic to ETFs in real-time and taking advantage of short positions....like a Bridge Rectifier in EE-speak.

[tsptalk]

ou81200 wrote:
Today, I'm 100% G. However, I put in an order to be 50%C and 50%S effective tomorrow. I did this because Intel is suppose to be putting some numbers out today after the close.
Looks as if this will be a very nice call.

[tsptalk]

Lobo wrote:
When I go to the Yahoo charts for the funds and put in a 3 or 6 month chart with a 20-day moving average, it looks "easy" to see where one should have bought and sold. Would it not work to my advantage to watch this closely day by day and sell a day or two after the chart falls below the ma line and buy a day or two after is rises abouve the ma line? I'm sure there is some reason that it isn't that easy, or everyone would be doing it. Maybe the 20-day average doesn't "catch up" to the current info since it has no data for the future to give an accurate average for this day?

Hi Lobo-
One thing to consider is if the market is trending (making higher highs and higher low, or lower highs and lower lows) or oscillating (bouncing up and down in a trading range). A moving average is more of a trend indicator where stochastics and overbought/oversold indicators are more oscillating market indicators. If the market is holding it's trend then using that 20, 50, or whatever works for you, moving avaerage is a good way to go. But as Rolo said, you can get whipsawed (get in on an up day, and out on a down day) if you use too short of a MA.


Thanks Tom, for all your dedication and effort to help folks like you do by having this site. It's more apprecitated than you really know, I'm sure!
You're welcome Lobo. Thanks for joining us!

Tom

[SystemTrader]

Rolo wrote:
You have a good point there, Lobo, and I use MA's to see where the TREND is going.

The tricky part about applying it to the TSP is the fact that your IFT request one morning won't take effect for two days. Then, you have to anticipate two days in advance when to get back in. Personally, I can easily find myself selling low and buying back high with the lag.

I think thereis money to be made byapplying that MA logic to ETFs in real-time and taking advantage of short positions....like a Bridge Rectifier in EE-speak.

When I was working on a way to switch among the TSP funds, I designed some models thatappeared to work greatif it weren't forthe 2-day lag.I've been thinking aboutdusting them offone dayandtrying someETF data.I'd try buying at the next morning's opening price (vs. the next day's closing price)whenever there was a signal.

With the TSP's 2-day lag, I found it betterto filteroutdaily noise and use weekly data.I'd be surprisedif any TSP"fast twitch" trend-following modelsgave good results over a long time frame. Ditto for counter-trend models that buy on dips.The lagis likely toruin them, too. But I could be wrong...

John

Should January end up as a losing month for the C fund, don't expect a significant rebound in February. Since 1950, whenever January was down for the S&P500, the following month was down 65% of the time and up only 35% of the time. It would also likely predict a defensive year overall.

[Lobo]

I just wanted to say THANKS folks for the comments on my question!

Lobo :)

[aggie]

I'm kinda stumped. I thought TSP was for a long time horizon. People are day-tradingtheir TSP based on the dollar, the yen, etc. What ever happened to "set it and forget it"? Dollar-cost averaging? I'm at 50%C, 30% S and 20% I. I'll leave it this way for a long time.

[JerBer]

Sounds kinda like the "Popeil" rotisserie cooker! Why would you want to forget it when you can shelter your earnings during periods of anticipated drops in the market? Ignorance cost me plenty during the time frame from 2000-2003, I'll never take an indifferent attitude about my retirement nestegg again!

[Safetyguy]

SystemTrader wrote:
When I was working on a way to switch among the TSP funds, I designed some models thatappeared to work greatif it weren't forthe 2-day lag.I've been thinking aboutdusting them offone dayandtrying someETF data.I'd try buying at the next morning's opening price (vs. the next day's closing price)whenever there was a signal.

With the TSP's 2-day lag, I found it betterto filteroutdaily noise and use weekly data.I'd be surprisedif any TSP"fast twitch" trend-following modelsgave good results over a long time frame. Ditto for counter-trend models that buy on dips.The lagis likely toruin them, too. But I could be wrong...

I tried playing with buying the dips for a bit last year and the "lag time" was indeed the killer. It worked about half the time.

If your system can be fined tuned to within a day or two (as you imply), there has to be a way to turn the TSP lag time into an "advantage" -- think puts and calls (without the wash sale rules). Just a thought...

[SystemTrader]

Safetyguy wrote:
I tried playing with buying the dips for a bit last year and the "lag time" was indeed the killer. It worked about half the time.

If your system can be fined tuned to within a day or two (as you imply), there has to be a way to turn the TSP lag time into an "advantage" -- think puts and calls (without the wash sale rules). Just a thought...

Possibly. I wouldn't buyoptions at every signal, though. When you buy options, you have two things going against you from the start: (1) unfavorable bid/ask spread and (2) time decay. During a bearor "choppy" market, there are times when I'd be happy to geta small gain for the TSP/mutual funds with ashort-termbuy signal. With options, it can behard toprofit onsuch small moves with the time decay and transaction costs. You have to be really accurate and probably need totrade intraday for optimal results.

I do trade options, butIusuallysellthem via "credit spreads." This puts time decay onyour side. ItradeOEX (^OEX on Yahoo) stock index options. For this, I use avariation of mytimingsystem and acounter-trend model. The basic idea: if thesystem is on a "buy" signal and the market takes a strong 2-4 day dip, I sell a bull put spread far out of the money. I do the reverseprocess if the model is on a "sell" signalusing a bear call spread. You can easily automate orders to do this withstop/limit orders and if-then conditions...so you don't have to trade during the day.

I mayconsideroccasionally buying options when there are indications of a strongmarket reversal, though. I thought about this last October when the S&P 500 touched below 1100 and the OEX was about 520. I did my credit spreads, but didn't buy calls...oh, how I wish I had! A friend of mine bought QQQQ calls around that time and made a small fortune...

I hope I didn't get too technical with the options lingo?

John