The index of leading economic indicators came out today & it was stronger than most anticipated. This is the 6th month in a row that the index has been up, which signals an expanding economy for the next several months.
Story:
http://www.bloomberg.com/apps/news?pid=20601068&sid=aJXD05.1IxF4I was going to say that the LEI index probably indicates that there won't be a "double dip" recession as some are fearing, but I notice that someone in the article mentioned that. What I've been seeing in the Dow is a strong rise, followed by a pause or a drop back, then another rise, pause, drop, repeat. If you look at the chart, so far the RSI @ 70 has been the signal to watch for. Similarly, an RSI @ 50 (or just below) is another signal:
http://stockcharts.com/h-sc/ui?s=djia70 & 50 would have been great places to jump out of or into the TSP's stock funds. The trouble with signals, though, is that after a while they stop working, so don't get too comfortable with just one indicator.
Today's rally was impressive - I haven't read any commentary on it yet, but I suspect it had something to do with earnings. We're in the heart of "earnings season" again, and that could move the market for awhile. Traditionally, the stock market has been strong during the last month or so of the year. This year could bring more tax-loss selling, as people sell their losing stocks for a tax break, but there is a positive inflow of funds into the market toward the end of the year.
Again, the market has come a LONG way back, and at some point there SHOULD be a nice-sized pullback. I guess it could be like a reverse capitulation. Capitulation is when EVERYONE gives up and sells - that's the time to buy. So when everyone jumps in and buys - is that the time to sell?
The C fund is toying with the $13 mark - it almost got there on Oct 15. And while I'm thinking about it, the L funds have performed pretty well - I was looking the other day & got the impression that they held up better during the massacre & bounced back better too. I didn't do the calculating I'd need to know that for sure, just a quick look at the numbers.
I've been over at the OPM site running their retirement calculator, and it looks as if I could bail out of the PO, but I'm sticking around for a while just to be ornery.
