Edited by author 11-27-2009 08:05 AM
I've rarely seen the futures down as much as they are right now (235 points on the Dow). Maybe the market will take a big hit today - trading volume is usually light after Thanksgiving, which could exaggerate a market swing. I haven't done any reading about what the experts say is causing this, and I've got to get ready for work, so let's see how this goes...

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OK, I just did a quick search, and it looks as if debt problems in Dubai are roiling the markets. I'm not sure if this is bad enough to cause a total crash, but it might be the excuse the markets need to finally go into the correction mode.

TSP funds' performance for November:

http://www.postalmag.com/tsp.htm

Looks like the C fund did best, up 6%.

Edited by author 12-28-2009 11:45 AM
The TSP site has an intro for the new system to go into effect next year:

https://beta.tsp.gov/trailer/trailer.shtml


Looks like the link doesn't work, so you'll probably have to go to the TSP site & sign in to watch the video.

It was a GREAT year to have rode the risk. I wasn't physic, I was lucky, but I simply believed things HAD to be better than 2008.

The problem is I feel like a pullback might be on the horizon. I have to decide if and when I should bury my new found treasure back in safety land.. if only for a while.

The final numbers are in, and the Thrift Savings Plan had a rather remarkable year in 2009.

Tom Trabucco, director of External Affairs for the Federal Retirement Thrift Investments Board, said last year was the best year for stocks since 2003.

Gains are as follows:

    * G fund - overall gain of 2.97 percent
    * F fund - overall gain of 5.99 percent
    * C fund - overall gain of 26.7 percent
    * S fund - overall gain of 34.8 percent
    * I fund - overall gain of 30.04 percent
    * 2040 L fund - overall gain of 25.19 percent
    * 2030 L fund - overall gain of 22.48 percent
    * 2020 L fund - overall gain of 19.14 percent
    * 2010 L fund - overall gain of 10.03 percent

Though the funds all finished positive, Trabucco reminded investors that many, if not most, have yet to gain back what they had before the market crashed in September, 2008.

"The 2009 rally failed to rescue investors from the worst return in any decade for the S&P 500. It all depends on how you look at it and when you start the measuring and when you end the measuring. This decade, of course, had two bear markets after the Internet bubble collapsed in 2000."

When compared to 2008, though, Trabucco said things have gotten a lot better.

"We did, in 2008, have two funds with positive returns -- the G fund returned 3.75 percent and the F fund had a good year at 5.5 percent. But, our three stock funds last year -- and all L funds -- had negative returns."

Are there lessons to be learned when it comes to keeping your money in one place? Trabucco said, maybe.

"If you have been in the S&P 500 for the last 10 years exclusively -- if you were a buy and hold in just those funds, you lost money. That's a difficult message to give even to the long term investor. Up until now, the claim by Index supporters was that there has never been a 10 year period when the S&P 500 has lost. Well, that claim can no longer be made."

As for 2010, he said he can't make predictions about returns, but can fill TSP participants in on some new features.

"These come from the so-called Tobacco Bill that was passed in June of 2009. . . . We have already started the immediate agency contributions. We put up an interim system for federal spouses to take over the TSP account and leave their money in that account if they would like to do it. We will be putting up a more permanent version of that in early 2010 that will allow surviving spouses to have their own TSP account and manage it. It will not just be limited to the G fund, which is the interim arrangement.

"Secondly, we will be putting up the automatic enrollment program [which] will automatically enroll new employees in the TSP at a contribution rate of 3 percent and put those funds in the G fund and then turn it over to them."

pabak, it looks as if we got a bit of a pullback this week. After hitting a new high on Tuesday, the market proceeded to drop Wednesday, Thursday & Friday. It's hard to say if this will continue next week, because a lot of investors have been jumping in whenever we get a drop. I've thought a few times that we'd get a bigger drop, but the market bounced back. What seemed different this week, was that there were several days where the market had 100+ point moves. Up 100+ Tue, down 100+ Wed, down 200+ Thurs, and down 200+ Friday. That type of trading could signal a period of increased volatility, and indeed, the VIX has popped up after dropping to a fairly low level.

I put all my $$ into the G fund at the end of last year, not because I thought the market would tank, but because it had gone up so much I figured a correction was overdue. AND remember, I'm staring retirement in the teeth, and can't afford to take a big hit, so I'm being extra cautious.

Anyhow, today's value for the C fund was $12.9525, which is down about 69 cents from the $13.6432 level it hit on Tuesday. I'll try to do a little technical analysis over the weekend if I can (tomorrow's my day to work the J). If we got a 10-15% pullback, that might be a good time to jump in, but the market has not been giving people the chance to buy dips as it hasn't been dropping more than a few days before running back up. Maybe this time will be different.

OK, taking a quick look at the S&P chart, the market has dropped below the 50-day moving average. This is the first that has happened since last Nov. Also, the RSI (a measure of market strength) has fallen to 36.85. A while back (/m1489), I pointed out that the market seemed to be pulling back when the RSI went up over 70, and moving up when the RSI dropped to around 50. Most technical analysis guys consider an RSI of 30 to be where the market becomes "oversold". The last time on the chart where I can see that happened was March of last year when the market absolutely tanked (to see a yearly view of the chart below, you have to scroll down to the "predefined range" box & click on 1 year from the drop-down menu).

http://stockcharts.com/h-sc/ui?s=^spx

Anyhow, if you look at the close for 1/19, the S&P is now down a bit more than 5%. Most "experts" agree that a 10-15% pullback is "healthy" for the market, especially after we've gotten a big run-up like we had last year. Some of the reasons I'm hearing for the drop this week were that China has taken measures to slow their economy, there is now some question as to whether Fed chairman Bernanke can get re-appointed (market hates uncertainty), moves by Pres. Obama to tax & reign in the banking industry, some of the company earnings coming out weren't good enough, and the Senate election in Mass. shaking things up in D.C.

Of course, any or all of the above COULD be the reason for the market pullback, BUT in sports parlance, the market was overdue for a correction. The news we're seeing probably only gave traders the "excuse" they needed to sell. There have been times when the market failed to pull back in the face of bad news, and failed to move up after a spate of good news. Try to go with the flow, and good luck.

As you no doubt have heard, the market got clobbered today.

Taking a quick look at the drop, I figure the C Fund will fall 40.5 cents tonight to right around $12.60. Just when I was questioning my move into 100% G Fund - hooray!

I'll try to stop back later for some TA. The Dow finished very close to 10,000. It looks to me as if the S&P could "test" the 1020-1030 area (finished today @ 1063). A big part of the drop today was blamed on the unemployment report, and the jobs report is coming out tomorrow, so a good report could stop this decline in its tracks. There's also more buzz about problems in the financial sector, so keep watching & good luck.

I suspect our friend over at TSPtalk might throw in the towel tonight, so be sure to read his summary.

manOman: Looks like you nailed it again. I am still laughing about "our friend over at TSPtalk might throw in the towel tonight". He must do a great deal of research but I think he just over analyzes everything. Still laughing.

The S&P closed today @ 1046, and the Dow @ 9,908. That's a pretty good drop from the close of 1150 & 10,725 just 3 weeks ago on Jan 19. According to my figures, that puts the S&P 8% off its high, while the Dow is down about 7.6% from its high. The magic 10% numbers would be 1035 & 9653.

Looking at the chart for the S&P, the 200-day EMA is @ 1046.5, while the 200-day simple MA is pretty close to 1020. The RSI is @ 34.27. While it wouldn't surprise me to see a bounce up from the recent drops, it's looking as if the market may have farther to drop. Watch closely what happens when the market is close to any of these numbers, since a drop BELOW (especially the 200-day MAs) could indicate a larger correction. Looking at the S&P chart, I think I see some resistance right around 1030.

http://stockcharts.com/h-sc/ui

In previous commentary, the TSPtalk guy noted that the market has had a pretty good run of up days for the last several Mondays, usually after being down on Friday. I believe I remember pabak finding a similar trend last year sometime. At any rate, it didn't work this Monday, and with our stupid rules on TSP transfers, we probably couldn't have played this trend.

Got to go dig out the snow boots - I'm hearing yet ANOTHER big snowstorm is fixing to bury my route tomorrow & Wednesday. manOman!! Where's my mailhawk?

"While it wouldn't surprise me to see a bounce up from the recent drops,"

The futures are up over 80 on the Dow this morning, so we may see the bounce today.

The weatherpeople keep adding extra inches to the snow forecast, so I'm heading out.