12/03/12
By the close on Friday, stocks were mostly flat although the intraday action saw the indices bounce between gains and losses for most of the day. It seemed investors didn't know whether to buy or sell before the market closed because of the potential for fiscal cliff news over the weekend. The Dow gained 4-points on the day.
[TABLE="width: 88%, align: center"]
[TR]
[TD="width: 241"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 154"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] 0.0036%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] 0.04%[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] 0.01%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] 0.08%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] 0.08%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
Here are the final TSP fund returns for November.
As I showed in the Weekly Wrap Up, the S&P 500 is very closely following the action of last spring. Should it continue we would see higher prices a month or more from now, but it could be a choppy period. With the fiscal cliff negotiations going on, I can see choppy action being the short-term norm as investors react to every news headline.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Choppy upward action will keep buy and holders nervous but they'll make money. Market timers can do very well if they stay in sync with the chop, but if our timing is off it be costly if we are out of sync and sell weakness and buy strength.
The chart of the Nasdaq shows us the recent upside breaks above the descending trend and the 50-day EMA. It also shows the gap left open about a month ago (blue) getting filled, and since we know gaps almost always eventually get filled, we have to be concerned that the open gap down near 2860 will be a target sooner or later.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The indicators are mostly showing short-term overbought readings, while sentiment moves from overly bearish to neutral.
The TSP Talk Sentiment Survey System moved to a neutral reading for only the 2nd time since early May. Every other week since then produced readings that had either overly bearish sentiment (which is a buy signal) or overly bullish sentiment (which is a sell signal). Since the neutral reading comes while the system is on a buy signal, the system remains 100% S fund for this week.
People that watch this Sentiment System seem to have a love / hate relationship with it. If it is doing well, they jump on board. If it has a couple of bad weeks, they distance themselves from it. Well, the system is now up 17.5% for 2012. That is beating every TSP fund and, of the approximately 1000 accounts being tracked on the TSP Talk AutoTracker, the 17.5% return ranks it #39 on the list. Not personally following it signal for signal has cost me, but I certainly make note of which way it is leaning when I make my decisions.
It is no surprise that December is one of the most consistently positive months of the year as it has closed higher 75% of the time since 1950.
Chart provided courtesy of www.sentimentrader.com
This year, however, the fiscal cliff negotiations could play a major role in whether the month follows the historical trend or takes the 25% road less traveled. Right now the market is acting as if it expecting a positive resolution to the negotiations. It makes me think we could see a negative "sell the news" reaction whatever happens. But that may not come to fruition until January.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
