TSP Talk - Thrift Savings Plan Strategies

Market Comments

February 16, 2010

Current TSP Share Prices

Today's Commentary (Short Term Outlook)                                   Printer friendly

S&P vs. the dollar

Stocks were mixed on Friday after an entire week of wild swings. The Dow close down 45-points on the day, the S&P and Dow Transports were also down, but the Nasdaq and small caps managed decent gains.

For the TSP, the C-fund was down 0.25%, the S-fund was up 0.79%, the I-fund dropped 0.87%, and the F-fund gained 0.16%.

The S&P 500 has been able to remain above the low made a couple of weeks ago after the reversal off of the 200-day EMA, but the rebound has created a very clear bear flag pattern, which is a bearish formation. If the bear flag plays out as they generally do, it could be setting us up for at least a test of that low. Of course the bear flag could surprise us and breaks upward, or just not break down, in which case we'd have to see what is happening (new patterns, indicators, etc.).


                    Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

For at least the last three months the S&P 500 and the dollar have been on opposite courses. If the dollar rallies, stocks have struggled. When the dollar has pulled back, stocks have rallied. The two indices remain in strong trends moving in opposite directions at the moment.


                  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

With the dollar currently pushing the bottom of its trading channel, and the S&P against the top of its trading channel, we will either see a continuation of the trends, in which case stocks would be down this week, or we could see a break in the trend leading to the likelihood of a rally in stocks.
The NYSE overbought/oversold indicator is not only off of its oversold levels from earlier in the month, but it is actually on the overbought side, although bordering on neutral - nothing extreme yet.

                  Charts provided courtesy of www.decisionpoint.com, analysis by TSP Talk

I was out of town for the last four plus days and didn't watch things as closely as I normally do, so I feel a little "off" as far as the market goes. That is what happens during holiday trading. The volume usually lightens up leading up to the holiday, then everyone comes back to work the day after and adjustments are made, and as I mentioned last week, sometimes the pre-holiday action gets reversed after the holiday. We'll have to see what happens early this week to determine which way this market wants to go.

That's all for today. Thanks for reading. We'll see you back here tomorrow.

Tom Crowley

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