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| Today's Commentary (Short Term Outlook) |
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Waiting Stocks were mixed again yesterday as the Dow was up another 46-points, but most of the indices ended flat to modestly lower. There was speculation that the Fed will raise their discount rate as the economy strengthens without rising inflation. Other than the G-fund, all of the TSP funds closed lower. The C-fund slipped 0.03%, the S-fund fell 0.46%, and the I-fund lost 0.88%. Bonds also closed lower dropping 0.10%. The S&P 500 had kind of a meaningless inside day as yesterday's high was lower than Wednesday's high, and the low was higher than Wednesday's low. Volume was light, but the breakout is still holding making for a nice bullish picture, although still quite overbought. A pullback to the 20 or 50-day EMA would be greatly welcomed as support gets further and further below the index, although the 1150 breakout area could act as support as well. 
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The Dow Jones finally followed the leaders and broke out yesterday. The Dow and the S&P 500 are the followers and so far they have both followed the leaders (Nasdaq and Dow Transports) very well.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The Rydex Asset ratio tells us how much money investors are putting in mutual funds that are bullish, bearish, or just in cash (money market). Right now the bear fund assets plus the money market assets, divided by the money going into bullish funds is at a 0.50 to 1 ratio. That means for each dollar going into a bull fund, only 0.50 cents is going into a bear fund and / or money market.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk That 0.50 to 1 ratio has led to some short and longer-term market peaks in the past, with the most recent being in mid-January, just before the correction. I am in the same position as I've been in for a couple of weeks. I'm waiting for a pullback or correction so I can put some money back into the stock funds. Right now, things are just too extended to the upside to join the fun. Thanks for reading. We'll see you back here tomorrow. Tom Crowley |