Market Talk

[Spaf]

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Market feelings for this week indicated that earnings were growning slowly, but positive, and with a light calendar of events due this week. US stocks should be trending towards more gains. The dollar was weak, and energy prices were reported high.
The biggest positive was the last week elimination of election uncertainty.
Last week market gains were: DOW 3.6%, NASD 3.2%, and S&P500 3.2%.

From Oct 25 to date in the Bull market the TSP CSI funds have increased:
C=+.77, S=+.68, and I=+.80

Right now my allocations are: 25-20-25-25-5. Willload a transfer for 55%C and 45%S, and depending on Mondays outlook, I'll either fly or cancell, or transfer to the G fund. Somewhere near there should be a correction in the market, the question is when? Chances are we could fly through it, but it sure would be nice to swerve and miss it. I Don't know if that is possible without sacrificing too much altitude. I'll just have to see!

Attached is the 1 yr. S&P 500 chart with 20 day moving averages, as of 11-05-04.

Careful

 

[coolhand]

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For anyone that has been interested in my ramblings about the dollar here is another article that continues to point to an ever weaker dollar.

http://news.ft.com/cms/s/257979a6-30f4-11d9-a595-00000e2511c8.html

The "I" fund is looking like it will continue its upward trajectory. I am going to reallocate my portfolio Monday to gain exposure to the "I" fund. I am currently 50% "C" and 50% "S".Not sure yet what my new allocation will be, but will probably go 33% "I".

 

[Paul]

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Another view on the dollar.

 

[Spaf]

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Coolhand / Paul Tks!

WOW! You have got to see this, especially the math members!
The TSP web site in their "TSP Highlights for October 2004" lists the TSP fund balances, by fund, totals, and number of participants.

RE: http://www.tsp.gov/index.html

The RE will take you to TSP Headlines. Then go to Participant Statements and Highlights, Then to TSP Highlights.
Your looking for "TSP Highlights for October 2004".

As I see the numbers. [TSP has $138.8 billion with 3.3 million participants [with average porportional investments of, as I see it: Approximately G = 42%, F = 7%, C = 42%, S = 5%, and I = 3%]].

 

[coolhand]

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Paul wrote:

Another view on the dollar.

Another good analysis. This one points to a strengthening dollar given the cited factors in the article. The question is how long before the dollar strenthens. The article says over the next few months. It also seems to indicate that China will keep its Yuan pegged to the dollar. I need to digest this. Not all of it makes sense to me.

Thanks Paul.

 

[Spaf]

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RE: Sunday post to possible change allocations.
After seeing Monday openings, decided to remain with light to moderate allocations and not get aggressive at this time. Advances/corrections could go either way. Market could be firming up, correcting, or just waiting for the Wednesday Fed report, etc. Don't know? So I'll stay with 25-20-25-25-5 for now!

 

[Spaf]

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Will be continuing my allocations as mod/light. However, the F fund pricing went below the 20D MA and my P-SAR gave a stop reverse to go short.
Changing allocations to 50%G, 25%C, and 25%S for tomorrow.

The I fund is a good performer, but I'll let coolhand and Paul research it futher.

There is mixed talk if the current pullback or correction will be mild or moderate.

The FOMC will meet Wed. 9:00ET, with announcement at 2:15ET.

 

[coolhand]

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I've read too many articles that indicate the dollar may not have hit its low yet to ignore all the data. Here is another one that supports my stance.

http://caps.blogspot.com/

As I mentioned this morningIreallocated my TSP positions today and went 60% "C", 10% "S", and 30% "I". I like the "C" fund because it is notas interest rate sensitive as the "S" is and I am taking a moderate position in the "I" fund simply because I believe there is more up side in the short term.

Things are getting real interesting in the market right now. Europe is not happy with the continuing decline of the dollar and Asia is still trying to keep their products streaming across the Pacific to the U.S.further extending our trade deficit (and I think they will succeed for awhile yet). Monetary policies may have to change down the road, but when?

Please understand that Iam not making recommendations or predictions. I only offer an opinion based oninformationI collectand my interpretation of it. I do not believe everything I read and strive to poke holes in any analysis. The market has a mind of its own and does not always conform to our expectations (what else is new). I welcome your opinions:^.

 

[coolhand]

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Another indicator of the world's viewof the dollar is gold. Gold is increasing in value. Remember, the U.S. dollar is considered the monetary world standard. And when the market gets spooked by a weak dollar, gold tends to go up in price.



This is just the last month. See a trend?

Here's an article to go along with the chart.

http://news.yahoo.com/news?tmpl=story&u=/nm/20041105/bs_nm/markets_usa_commodities_dc_1

I do not believe the weak dollar is something that will reverse course in short order. Our economic policy is attempting to reduce our trade deficit by making our products cheaper than those overseas and our national debt shows no signs of reversing either.

The article Paul provided had some points I agreed with, but also seemed to contradict itself in a couple of paragraphs.Most other reports I've read are mostly in agreement with what I have posted.

I am very interested in what China does. Are they going to discontinue pegging their currency to the dollaror switch to a basket of currencies approach.

If the market gets much more uncomfortable with the dollars descent there could possibly be a much stronger dollar sell-off. I am trying to position myself to benefit from that very real possibililty, but am also watching for any sign of strengthening. Let's see if Alan Greenspan has anything to say about this.

 

[quenchmaster]

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Lot's of good stuff here... One thing to note, what we see here in the past few weeks/months is a not to distant reminder of 1979-1980 era. check the archives. One story/stat to read. http://www.technicalindicators.com/gold.htm
It's intersting when you look at the similarities?
Dollar down...Gold rises...International UP UP UP! Oil UP!
Although I know little about any of this, I try to look for similarities in addition to paying attention to what everyone else has to say. Including the FED? I think even if the market reacts negatively to what the FED has to say on Wednesday, it will return to it's current trend by the end of the day of the following. This site is great. Thanks for letting us be a part of it.

 

[Spaf]

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Quench / Coolhand
Enjoyed your comments :^. I use Yahoo a lot for stock charts and etc. The US Dollar vs EUR can be found at http://finance.yahoo.com/q?s=usdeur%3Dx FYI Yahoo uses the symbol USDEUR=X. They have the Trade, Charts, and Headlines. The chart has some variables for different time frames.
I know you are helping all listeners by continuing your reasearch into the I fund.:i

In synopsis for other listeners:The fund is suppose to match the EAFE index, and it has a twofold risk of both market and currency. In 2003 the fund earned 38.6%, but almost half was due to the decline of the dollar. If unchanged the return would have been around 20.3%. Thus, it is also the most complicated fund, and the least held fund by TSP members. However, for the month of October it was the top performer with a +0.35, and the next best fund was the F fund at +0.12. Thus when the C & S funds are down, the I fund could well be the place to go, but not before it's understood and evaluated with the risk it carries.

 

[etrujillo]

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Does anybody have a feeling for the C-fund for the next couple of days?

 

[coolhand]

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Thanks for the thumb's up Spaf!

I really enjoy learning about the market. The more we understand about it the better decisions we can make. Collectively we have alot of potential. Thanks for the links, I've pagemarked them.

All: More info on the dollar below.

http://biz.yahoo.com/rb/041109/markets_forex_6.html

 

[smedlap]

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Market is headed higher thru next FMOC meeting. Best to not day trade but speed bump trade (FMOC). Fair value for S&P is 1250 which means we are well under market value. How we get there could be fast or progressive, probably the latter thru 1 July. That's about all for next year but have to read the progressive market tea leaves. Oil is dropping which further enhances market returns. Best 3 months of the year for the market. C fund is the place to be right now after we get the already factored in 1/4 point raise. Market should have consolidated these past 2 days with a figestive pullback which amounted to only .5% gain. That may mean there is a lot on money on the banks to be played because that was a nothing consolidation. My thoughts as I am 100% C. I may follow later with trailing S as Tom haspreviously printed sage rational that S always follows C just as it did today. Counter thoughts?

 

[Spaf]

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Consideration (s)

As MT would have said. Investment preservation is a key issue. Well this holds true, especially for those of us nearing retirement. I have less then 2 years before I retire. So I "talk" from a different perspective then one that has a time to go.

Since 2000, we have had a different market then we had in the years prior. Yes we have bulls and bears, but they seem more sensitive, and ups and downs appear to me to be more volatile, i.e., the Bull market of 2003 and the new Bull of 2004 started with considerable ups and downs before settling down.

Someone once said "Don't play the stocks for more then you can afford to lose". Well this is where allocations can be on our side, especially since we have the G fund. We dont have to play with all or nothing in particular stocks (F, C, S, or I). We can reduce our risks by allocating smaller percentages during questionable times, and going more aggressive when steady advances materialize.

The G fund will preserve savings. The F fund does not appear to be good at this time; below 20D MA pricing,negitive on the P-SAR, and rates. The I fund has beengood (especially last month), but it has a twofold factor of currency and market that needs constant attention. The C and S funds are the remaining options: I will be allocating funds as moderately conservative with 50% G, and the rest in the C and S funds, that is, until the general advances in the market show more stability then they do right now.

Rgds& Be Careful! Spaf

 

[coolhand]

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Because the "I" fund is more difficult to track, I have been posting information of late concerning the potential risk/rewards it has to offer.

It now appears the EU may begin stepping in tobuy our dollarsin an effort to prevent their currency from continuing to strengthen.Read the article below for what I consider to begood food forthoughtas far as what may happen with the dollar.

http://www.thestreet.com/markets/rebeccabyrne/10193360.html

 

[cowboy]

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smedlap wrote:

Market is headed higher thru next FMOC meeting. Best to not day trade but speed bump trade (FMOC). Fair value for S&P is 1250 which means we are well under market value. How we get there could be fast or progressive, probably the latter thru 1 July. That's about all for next year but have to read the progressive market tea leaves. Oil is dropping which further enhances market returns. Best 3 months of the year for the market. C fund is the place to be right now after we get the already factored in 1/4 point raise. Market should have consolidated these past 2 days with a figestive pullback which amounted to only .5% gain. That may mean there is a lot on money on the banks to be played because that was a nothing consolidation. My thoughts as I am 100% C. I may follow later with trailing S as Tom haspreviously printed sage rational that S always follows C just as it did today. Counter thoughts?

Here is my counter thought. The S fund is actually leading the C fund up. Why? If you look at the funds the S fund will go up .03 or .04 then waits for the C fund which will go up .20 the next day and the S will go up .15 that same day. If you look at the past week or so the S has gained more than the C. The S fund is part of theC fund and it effects the C which ever way it fluctuates.I would get into C for the simple reason it has more catching up to do, if you believe that. I would play both because there both going up. ReadRods thoughts, if the markets go up today due to (GreenMonkey) like they have in the past then the next 2 days may be down if so this is your rest andMonday jump back in.So if I play this out I will need to move this morning back into G or F as Thursday and Friday may be down days. If your more long term forget the speed bump as this is just a nick in the market. When the markets reach their high watch the C fund my thought is the C will go down first as it is a weaker fund.

 

[tsptalk]

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coolhand wrote:

Because the "I" fund is more difficult to track, I have been posting information of late concerning the potential risk/rewards it has to offer.

It now appears the EU may begin stepping in tobuy our dollarsin an effort to prevent their currency from continuing to strengthen.Read the article below for what I consider to begood food forthoughtas far as what may happen with the dollar.

http://www.thestreet.com/markets/rebeccabyrne/10193360.html

I also heard that. One article I read from a respected market timer said "Don't short the dollar". He gave the same reason, that Europe can't afford to let the dollar get too low.

 

[tsptalk]

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Expect a slow morning and fireworks after 2:15 PM ET.

What ever happens (big rally or big sell off), don't panic. It tends to even out later or the next dayas it is all day traders playing games.

 

[Rod]

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tsptalk wrote:

Expect a slow morning and fireworks after 2:15 PM ET.

Yeah, I expect the same thing too.