Short term market outlook

[IBD Fan]

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Thanks Rolo!

I will be watching the market this week. If it pulls back and the IBD market pulse doesnt change direction (rally), then I will be getting back into C and S.

Cant get the pulse of the I fund yet (is it in a "rally" cycle and heading up) like the US stocks cycle?

 

[Rolo]

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IBD Fan wrote:

Cant get the pulse of the I fund yet (is it in a "rally" cycle and heading up) like the US stocks cycle?

Don't forget to look at the I Fund in the context of the US Dollar. Right now, the buck is bucking and is watering down the very nice gains of the foreign market.

The international markets do seem to shadow US markets in some ways, which is pretty odd these days.

 

[IBD Fan]

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Hi Rolo, you seem to feel comfortable in the I fund. What are you using to guage where its at? For today 17 Feb the dollar index went down. The MSCI EAFE index was up so I would expect the I fund to go up. -- But that did not track with the US stock market which took a hit today. So what's up? Will the international markets take a hit tomorrow and have an impact on the I fund - seems if I fund was following the US stocks it would.

Update on the IBD Big Picture Market Pulse:

11- 18 Feb: Rally back on track (even after a down day on 17 Feb)

Moved to 100%G effective 18 Feb.Lost on the F fund. Willsit out this next few days and recheck the direction in IBD. Following Tom's move here - agree with his analysis.

Tempted to jump into I fund but dont know enough yet, As compared to the C & S Fund its outperforming so far in 2005.

 

[Rolo]

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IBD Fan wrote:

Tempted to jump into I fund but dont know enough yet, As compared to the C & S Fund its outperforming so far in 2005.

Yeah, and it kicked major butt in 2004, too. It is still going along, so I'm not going to miss it. Honestly, I'd rather try and lose a little than wait, wait, wait, ah, missed it.

IBD Fan wrote:

I fund. What are you using to guage where its at?

I use EFV primarily and EFA to get some sense of volume.

IBD Fan wrote:

But that did not track with the US stock market which took a hit today. So what's up?

International markets seems to be somewhat tied to the US markets on a larger scale, broader movement. Not always, but compare EFV with DWCP or SP500 over several years and see.

I am starting to wonder if investing internationally will be a 'safe haven' for many investors during rocky US markets. Add the dollar's decline to that equation and who can say 'no'?

IBD Fan wrote:

Rally back on track (even after a down day on 17 Feb)

See my account babble...I think this may be just a few-day breather. I am disappointed that the S&P500 lost more than Wilshire 4500 today.

Basically, I need to be convinced to get out of equities.

 

[IBD Fan]

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You were not convinced by the sharp two day drop in Jan?

 

[Rolo]

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IBD Fan wrote:

You were not convinced by the sharp two day drop in Jan?

No. If anything, Jan 20-24 had me more concerned, which penetrated the bottom trendline, the two-day drop didn't. Failing to stay above our 50MA would get me out.

 

[IBD Fan]

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Here' what the indicator says for today's action:

"Rally under pressure"

The whole article:

Stocks Sink On Big Volume As Oil Surges
BY NANCY GONDO
INVESTOR'S BUSINESS DAILY

Stocks sold off heavily Tuesday as oil prices reached their highest level in more than three months.


Good Luck to all - we need it during these times! I will be cautious ans stay with G for short while more.

 

[CFenton1982]

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IBD Fan- Welcome, and I first want to thank you for posting those IBD outlooks. Do to the fact that I can't afford that subscription its nice to get something from somebody so thanks.

I allocated my funds 25% G 50%C and 25% S on Monday night. Not to excited with yestarday's market, but keep me informed with your I fund thoughts.

 

[IBD Fan]

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Welcome to the TSPtalk site. I read your post and am impressed by how young you are and well into the stock market. You have a whole lifetime ahead of you and you already have a good foundationto build upon.

I'm glad you are reading my postings. Hope it helps you. Sorry I havent got the I Fund "pulse" yet. My gut feel tells me its the way to go but my head tells me no - because I dont understand what makes it go up. I know its inversely related to the dollar but I think its a lot more than that. The dollar hasnt done much in the lasttwo weeks but the I fund has gone up quite a bit. So does anyone know what drove it up the last two weeks?:shock:

Good luck and happy stock pickings! Remember though the TSP is for long term investing so the longer your horizon the more advantage you have. Time is on your side so if you pick a good allocation strategy that suits your situation and fits with the market trend, you wont need to be making a lot of moves throughout the year.

 

[CFenton1982]

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Thanks IBD Fan! It surely is nice to hear some moral support in times like this when the market hasn't been the greatest and I'm hoping for my chance for the turn around. It's been a rough start but I think with all of my investments that have gone through Sept. 11th's crash I'm still up a couple thousand.

I too am curious about the I Funds returns when the dollar hasn't had much activity. I understand the principles, but would like to know some more.

I funds have been allocated and hopefully it stays that way; 50% G 25% C and 25% I. :^

 

[IBD Fan]

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Decided to make the plunge into equities. Got a false reading early today that the US market were headed down before 12 EST. Jumped in before noon at 25 C, 25 S, 50 I. Figured would be a good day to restart equities when the market is down but to my surprise the US market ended up 70 + on the DOW. Maybe it didnt turn out today like I hoped but another way to look at it is the US market is heading in the right direction - UP. And hopefully if nothing really big happens with the US dollar it will drag the I fund up as well.

In regards to the I fund, contrary to my thoughts of not knowing what makes it go up, I am betting on the recent past (this year and last year) where it outperformed the US markets. So mythinking is as long as I think the US markets will go up (rally cycle), I conclude the I fund should also go up. Not so much in a direct 1-1 relation but in general. This is based on the premise that the dollar basically remains neutral or (in a tight trading range). If major conditions change with the dollar, then I will adjust likewise.

The IBD big picture market indicator:

24-25 Feb: Rally under pressure.

Excerpts from todays article:

"Buying ramped up in the second half of the session, bringing the Nasdaq to a session-high close. The composite index rose 1% on heavier volume, after pulling back as much as 0.4% in early trade.

It was one of the Nasdaq's few strong accumulation days so far this year. But if you look at the overall picture, the index is still down 6% for the year, and is the only major market index that remains below its 50-day average.

By comparison, the SmallCap S&P 600 has held above that price line since Jan. 31, with the exception of one day. It led Thursday with a 1.2% advance and trimmed its year-to-date deficit to 0.8%."

 

[IBD Fan]

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I lucked out by jumping into equities effective today and caught the ride up. The rally seems like its getting started all over again - "shows sign of new life."

 

[IBD Fan]

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I included the entire ariticle from the IBD Big Picture for 28 Feb 05 but someoneremoved it - guess I'm not supposed to do that. Anyway here is the current outlook on the Market Pulse:

"Rally shows sign of new life"

excerpts:

"Its the 1970s again -- only this time without the ugly stagflation.

Housing and commodities-related stocks boosted the major indexes Friday, turning what began as a poor week into a positive reversal.

Smaller stocks, meanwhile continued to outmatch their larger-cap brethren. The small-cap S&P 600 bested the other market guages again with a 1.6% advance and a closing high. The 600 ws the first among the major indexes to confirm a new rally following Jauarary's brief slide.........

How market history repeats itself. Interest rates are still low. Baby boomers are moving into bigger, more luxurious digs. The global spread capitalism has sparked heavy demand for crude, coal and other power sources.......

Friday's solid US GDP report confirmed the 2000s are not the 1970s. The economy grew 3.8% revised upward from an earlier 3.1% "advance" figure and boosted by capital ivestments......"

My conclusion is at this time the US markets is still in a "rally" mode.

In another article from the same issue: "Investors Favoring Stocks Again After New Years Blahs Fade" excerpts:

Investors returned to world stock markets after a New Year lull, driven by optimism about global economy mixed with worries about the future direction of bonds.

Reuters asset allocation polls released Friday showed leading investors in the US, Japan, continental Europe and Britain lifting stock holdings to an average 62.1% of total holdings from 58.3% in January.....

The surveys reeflected recent moves on world stock markets, which have rallied after a ppor start to the year.

The main MSCI index of global stocks, for example, is up around 2.5% in February compared with a fall of up to 3.5% the first weeks of January.

My conclusion is at this time the I Fund is in a "rally" mode.

 

[tsptalk]

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IBD Fan wrote:

I included the entire ariticle from the IBD Big Picture for 28 Feb 05 but someoneremoved it - guess I'm not supposed to do that.

Yeah, I sent you a PM about it. I don't think it is kosher to post articles verbatim from a subscription website without written permission. Too bad because I like IBD but it's not one I subscribe to (can't get them all). If it's not a subscription site, to be safe,just give us the link to the article.

Thanks,
Tom

 

[IBD Fan]

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Thanks, Tom, havent read my emails recently. IBD is a subscription site for the Big Picture items and others. If its Ok I will just do the excerpts and report the indicator from time to time?:^

 

[IBD Fan]

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Decided to go 100% I fund put in the IFT to be effective 2 Mar.

 

[IBD Fan]

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Well isnt this market resilient! Hoping theresiliency continues into the next earnings report season which I think will be good for the market. We had big bad oil putting a scare into the market, yet it held - at least for the time being. IMHO, if oil was not a factor, the market would be advancing quite a bit more. The dollar is moving up yet the I fund isstraining to stay in the positive, so I read this as the equities (both US and International) are pulling it at this time. Cant really tell what impactthe jobs report will have an on the dollar - hoping it will be neutral - will wait and see - but certainly if it is good it should have a positive impact on the US market and lift the Internationals.

Still at 100% I fund.

 

[IBD Fan]

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Funny how after a big GREEN day, many get cautious. Must be the reverse psychology or the contrarian view. Was pleasnatly surprised that the dollar went down - the reports are that the dollar bulls were expecting a much larger jobs number and when itr didnt come, the dollar sank.

Will stay at 100% I and hopefully ride the day after "halo' effect for the Internationals (mostly Asia, Australia) to follow through with a small rally. Who knows what the dollar will do next? If it stays neutral, and the US markets continue to rally, then the I fund should do well. All this analysis is dependent on big bad oil staying out of the picture for a while.

Congratulationsto those who stuck with the "rally".:^

Good Luck in the future.

 

[tsptalk]

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IBD Fan wrote:

Funny how after a big GREEN day, many get cautious. Must be the reverse psychology or the contrarian view.

IBD -
When you say "many" are you talking about the people on this board or a more broader sentiment?You know I like that contrarian view so if the broader herd is getting cautiousthe rally may continue. If the caution is just on this board, I'm not as inclined to be bullish as we are all trained to go against the herd.

What is Bill O'Neil saying? I know he likes to see follow through on big volume. Does he think we have seen it already? The volume wasn't real great but I guess it was a Friday. Brokers are drinking slow gin fizzes by 2 PM.

Thanks,
Tom

 

[Guest]

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The two stocks that gave the Dow the largest percentage gain today was AA and XOM.

Not the two I want to see leading the pack. Since they both mean higher costs to the consumer later. The stocks I wanted to see have a good day were the tech stocks...they were Mr Softy (flat), HP (down over 1%) and IBM were down. Those are the three I want to see start to move. Not the commodity stocks. That is my contranian view.

Since XOM is the largest company in the world it gave a giant boost tothe 500. We want to see is XOM down 2% and the 500 up .96%. That WOULD BE a signal for me to get bullish. Today is just another step to the cave for me.

Just my thoughts.