TSP Talk - Thrift Savings Plan Strategies

Market Comments

March 11, 2010

Current TSP Share Prices

Today's Commentary (Short Term Outlook)

Patience needed for those waiting

Stocks continue to ride the upper resistance and anyone snoozing is certainly losing - well, not winning, anyway. The Dow was up just a couple of points, but the broader market indices picked up larger gains, refusing to let the overbought indicators slow them down for more than a day or two.

For the TSP, the C-fund was up 0.47%, the S-fund led the way again with a gain of 0.80%, and the I-fund picked up 0.61%. Bonds slipped 0.04%.

The current market seems to be in the same mode that we saw in 2007, as we've been talking about, but we also had a similar run last summer where the market jumped out of a consolidation period with a relentless move higher - but eventually pulled back (red circle below).

The S&P 500 has still not broken the double top, but most other indices have, particularly the smaller market indices.

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

The Dow Transportation Index followed the Nasdaq breaking bove that double top, and while it is bumping up against the upper trading channel, that resistance is still rising at a sharp angle.


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

The small caps of the Russell 2000 have already shot through the double top, and is now 4% above the breakout point. I would look for a possible pullback to the breakout area at some point in the coming weeks, but this is certainly a bullish looking chart.


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

Stocks are obviously overbought - this is not news to you, but as we have said many times, strong markets don't always fall when overbought. But if you are out of the market it is just too tough to be a buyer at this point, because we know you will eventually see a better opportunity.

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

That doesn't mean you will be buying at a lower level, but buying an oversold, or at least neutral, market, is usually a higher risk reward proposition. Be patient. You will get your chance.

I have to cut this short again today. I have season tickets to our local NCAA basketball team and they have been in their conference tournament the last couple of nights, plus my son's high school baseball team started playing games already, so I have been running around the last couple of afternoons / evenings. Hopefully things will calm down by next week.

Thanks for reading. See you back here tomorrow.

Tom Crowley

TSP Talk is in no way affiliated with the U.S. government, or military TSP Thrift Savings Plan, tsp.gov, or any other government agency. TSP Talk does not guarantee the accuracy or completeness of this report, nor does TSPtalk.com assume any liability for any loss that may result from reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice and are for general information only. The information contained on this website is for educational purposes only and not intended to be recommendations, and may not be published, broadcast, rewritten or otherwise distributed without prior written consent from TSPtalk.com.