Dow up over 458 points with about five minutes to the closing bell?
Now the question is how quickly will it fall? I almost feel like I should have climbed back out before tomorrow....then again there's still got to be plenty of upside on the markets before we get anywhere near where we were before. (If we do). Just don't know how much it's going to yo-yo beforehand.

One things for sure... my TSP account is going to show a hell of a lift tonight.

Right now, the US futures are up over 200 points on the Dow. Commentators are saying that the market is responding to the latest attempt to deal with the problems that banks & financial firms created for themselves. I haven't seen all the details, but there will be an effort by the government to get the "toxic loans" off the financial companies' books - I think by them selling the loans off to a 3rd party. Anyhow, the plan may not be perfect, but at least it's a plan. The market might make up its mind later in the day that the plan isn't good enough, and the market might go back down.

As our friend over at TSPtalk has noticed, the market is bumping up against the 50-day moving average (see my previous post). That range could provide some resistance, but if we break through, maybe we'll see an even bigger rally - we're due.

Edited by author 03-18-2009 11:06 PM
pabak - BULLS EYE!! Today's Fed meeting was credited for the late afternoon jump in the stock market after it had spent the earlier part of the day in the minus column. I read that the Fed would be purchasing various debt obligations, which should pump more money into the system (but will probably hurt the dollar & raise worries over inflation). Here's an article:

http://news.yahoo.com/s/nm/20090318/bs_nm/us_usa_fed_6

Looking at the S&P chart I linked last night, we're right up against that 50-day moving average, and I hope to HECK we bust on through. A technical analyst would probably say that the chart looks very much like a classic "V bottom", or an inverted head & shoulders pattern. - Let's hope!:

http://stockcharts.com/h-sc/ui?s=$SPX

If you consider that an inverted h&s, then the right side of the graph would have to go to around 825 [just looking again, that could be 875] to complete the pattern.

Oh, and before I forget, pabak, GO CAVS!!!!!!!!!!

manOman... I noticed you mention a "triple witch" options expiration for this Friday, but isn't it strange how seemingly a lot of us forgot all about the feds meeting today (Wednesday)?
Afterall, it wasn't that long ago when we were hanging on their every word and EXPECTING them to cut the lending rate each month, typically spurring big movements upward in the stock market.

Here's part of a story about just what tomorrow's meeting might produce, from daily finance.com ...

With rates near zero, markets await Fed's macro view
Tim Catts
Mar 17th 2009 at 6:30PM
Text SizeAAA

Filed under: Economy
Once upon a time, Federal Reserve Board meetings inspired intense speculation about the future direction of benchmark interest rates. There's no such suspense surrounding this week's meeting, however. The Fed Funds rate -- what banks charge each other for overnight loans -- has been as close to zero as it can get since December. With no sign of an end to the recession in sight, it's extremely unlikely the Fed will vote to raise it.

Instead, Fed watchers will be listening for a couple of subtler sounds.

First, they'll surely be very sensitive to anything the central bankers have to say about the direction of the economy. Fed Chairman Ben Bernanke didn't mince words during his appearance on 60 Minutes last weekend, confidently asserting that "we'll see recovery beginning next year." The statement released at the end of tomorrow's meeting will be a lot more detailed.

Any positive sentiments may spur investors to push stocks higher. It'll probably also lead some economic commentators to question the Fed's credibility given the seemingly endless stream of bad news about jobs and industrial production. On the other hand, housing starts last month rebounded from the record-low levels they reached in January. And wholesale prices moved a hair higher. How will the Fed balance these pieces of information?

The second development observers will be watching for is the Fed's assessment of inflationary pressures. If deflation looms, the board may signal they'd be open to buying long-term U.S. government debt as a way to inject money into the economy.

Edited by author 03-17-2009 10:52 PM
The rally has now shown some staying power. Previously, I suggested that we might get a test of the 800 level on the S&P. The 800 level is about where the 50-day moving average is, and represents some overhead resistance. The market has been way oversold, so this bounce isn't terribly impressive. That said, I think the market has moved up approximately 20% from the low, so someone who was very lucky or had great timing could be sitting with a nice gain in their TSP if they took the risk with the stock funds. Our friend over at TSPtalk continues to believe that we're probably seeing a bear market rally, and that we should sell into any up moves. The problem, of course, is to know WHEN to sell to take the maximum advantage of the move up. 800 on the S&P MIGHT be such a level, but that is only about 3% higher than where the market is tonight.

Looking further out, there is an options expiration Friday (I think it's a triple witch), and sometimes option expirations will move the market in the opposite way it has been going.

I've been hearing more talk of various fixes aimed at the mark-to-market accounting that has been jamming up the credit markets & hurting the financial sector. It's hard to say if this has already been factored into the market already. The Obama administration has been pretty actively "talking up" the stock market & Bernanke continues to make comments that we may be seeing the light at the end of the recessionary tunnel sometime late this year. I heard or read somewhere that one of the big-time analysts said this move up COULD last into May.

So, I've presented several possibilities, as usual. What YOU have to do is figure out what best fits your plan and act accordingly.

Here's a chart of the S&P 500 with the 50-day moving average:

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

[sorry - the above link is for the Dow. 7775 looks to be the 50-day MA there]

Here's the S&P (hopefully):

http://stockcharts.com/h-sc/ui?s=$SPX

Note that at the end of January and again around February 9th, the S&P banged up against the blue line (50-day MA), then dropped back down. Will that happen again? I don't think so, but if I were always right about the market, I'd be retired and would NEVER have to go through another count.

Yesterday was a nice follow-through day after the market managed to hold on to Wednesday's big gains. The S&P has now gone through that 741 level that the TSPtalk guy was watching. It would be nice to see it "test" the 800 level on the S&P, but with the recent run-up, a drop back (called "consolidation" by some) wouldn't be surprising. We need some more good market days strung together to have a sustainable rally here.

That said, I heard on the news this morning that a Citi official said they don't need anymore US funds - that's good news. Also, I heard that Bank of America said they would be profitable this year. The B. Madoff "perp-walk" probably made some investors feel good, but I'd like to see a few hundred or thousand of the people who "made-off" with people's hard-earned retirement funds thrown in the slammer.

The futures are up around 50-60 on the Dow, so we might get some follow-through today, but this is Friday, so the nervous nellies are looking at that loooong weekend. And speaking of the weekend, I'm thinking there will be a lot of rurals out there pouring over those anemic count sheets, trying to figure out how much money they've lost, and how they will be able to live on that.

Good luck.

HUGE up day today. The market was overdue for a bounce, since it's been down so long. I'm figuring the C fund will jump up 50 cents tonight, finishing at just below $8.37.

The big strength came today after word got out that Citicorp said they MADE money in the first 2 months this year, Bernanke said it was POSSIBLE the recession could end this year, and good ole Barney Frank weighed in on reinstating the "uptick rule" (it used to be that you could only sell stocks short after the price "ticked" up. With that rule gone, it's possible for short sellers to pile on & force a stock's share price down.)

We've discussed the uptick rule & "mark-to-market" accounting here in the past, and their role in the current market mayhem. I've been hearing rumbles that mark-to-market MIGHT be changed. That COULD give the market another boost, but I think I was saying the same thing several months ago and it didn't happen. I did see our friend over on TSPtalk commented on mark-to-market the other day.

What we want to see going forward is whether this up move has "legs". You want a rally with staying power, not a dead-cat bounce or one-day-wonder type of move, especially since it is so difficult to transfer your TSP funds now. The TSPtalk guy has cited the 741 level on the S&P as resistance, and it finished today at 719.60.

ONLY 4 MORE DAYS OF COUNT!!!!

According to my computer, the S&P was down 1% today, which would drop the C fund another 7.9 cents to $7.8676.

When I got up this morning, the Dow futures were down over 100, and I considered adding some more $$ to the stock funds. But then I read that Merck & Schering Plough were merging, and I thought that might be good news, but NO! Well, it was good news in a way, but the flood of bad news just keeps on keeping on. I'm reminded of 1972-1974 when the market just kept sinking day after day and no one thought it could end.

Check out the Downs' site. He is saying that a downside target of 5600 on the Dow is possible, maybe by July. He's also saying we could get a move up to 7500 BEFORE we head down to that 5600. I guess that would give me plenty of time to average in. Be very careful out there.

OK, so the Dow was down 280 today. The S&P dropped 4.25%, so the price of a C fund share should come in at $7.933 tonight - that's down 35 cents.

I just took a quick look back, and there were several days in the last year or so that the C fund was ABOVE $17!!!!

Another couple of hundred point drop tomorrow (remember, the employment # is coming out), and Mr. Market could overshoot the 6500 level that Downs was looking at.

I wish to heck that we didn't have the 2-transfer limit, as I would like to be averaging a SMALL amount of my TSP account into the stock funds as the market drops, but I can't do that!

Good luck out there - my count is currently showing me down 3 hours, but I wouldn't put it past the USPS to "lose" ALL the mail next week.

Edited by author 03-05-2009 07:56 AM
Right now, the US futures are down over 100, so we could get a "whoosh" to the downside. Yesterday, the market was up well over 200 near the end of the day, and dropped back to "only" 150 up.

I'm hearing some bad news about GM, so maybe we've got further down to go. Who knows?

Regardless of the day-to-day news, you just HAVE to think we're closer to a bottom than back when the market was at 14,000.

sccarrier, yes! I tried to outline that strategy in /m1420, but probably didn't get my point across.

I'm thinking that after this count, I'll probably have to cut back on my TSP contribution, but everyone should TRY to keep putting in 5% as the USPS match effectively doubles our contribution.

manOman,

another thought: those that are invested entirely in the G fund (depending on their time horizon), may want to consider taking their current and near future contributions and spreading it through the C, I, and S funds. In other words, begin to average in while the market appears to be near its lows.

Edited by author 03-04-2009 05:09 PM
Looks like we got a 19 cent gain in the C fund today. That would put it at around $8.28. The recent market downturn has been brutal. I heard somewhere that the market is down MORE THAN 50% from its high, and the drop so far this year has been one of the biggest ever.

If you think of the market as a spring, right now many people feel that it is oversold, and the spring is compressed. If that is so, then we COULD get a BIG rally that might occur over just a few days time - our friend over at TSPtalk calls it a "Whoosh!" If you get out of stocks before a "whoosh" up in the market, you'll miss out on a chance to get some of your "lost" money back.

IF you are currently invested in any of the TSP stock funds, my gut feeling is that right now is exactly the wrong time to get out. Just as 14,000 was the wrong time to be in stocks a year or more ago, 6,800 is probably the wrong time to be out.

A possible variation on your TSP investment that I suggested for some in /m1420, might be that IF you have the bulk of your TSP in stocks (ouch), it might be an idea to put some or ALL of your NEW contributions into the G Fund (safe). That way, while you wait around sweating & wondering if the market will ever come back, your NEW contributions will steadily accrue in the G fund - at least you'll see that portion of your money adding up. Just a thought, any other comments on strategy are welcome...

manoman... what to do? The temptation is to "save" what's left of my tsp ny moving it all to the "G" fund... but to do so would be at a terrible loss. I keep thinking the market is going to rebound, but even the "bargain hunters" are staying away in droves.
Kind of like thinking that my mail volume has to be better than the last day, but it isn't... at least not until the count is over.

Looks like the C fund was down another nickel today, which would put it at $8.09. I've been wondering whether we'll see a drop below $8.