TSP Market Watch

The market is trending higher, but on lighter volume.  Be careful.

No sooner had my system gone to “BUY” on Tuesday; the Fed caused a negative reversal in the market on Wednesday and triggered it to switch back to “SELL.”  Bernanke lowered projected growth estimates and raised inflation estimates.  He also said the debt ceiling would not be raised, thus kept level.  This could be a significant headwind for the market going forward and bodes negative for the market.  The market may have to correct a bit further before we see QE3.  Shortly after making these statements the market reversed hard to the downside.  Forced selling by institutions seems to be dominating the market.  The Fed essentially admitted yesterday that U.S. banks have “SIGNIFICANT” exposure to European banks.   

Look, we could be witnessing the beginnings of the markets coming undone again.  To say I am getting extremely bearish is an understatement. 

100% G Fund for me for now.

While I still have a few shorts in this market, my market timing indicator just signaled a “Buy” which automatically threw me 100% into the S Fund by COB today.

MY OPINION ONLY……..Okay, let’s talk markets.  With the market having rallied so sharply off the lows of mid-March and right up near the mid-February highs, it is entitled to pullback and consolidate for a bit, but QEII is keeping the market in play.  Yesterday’s early morning sell-off on news of another Japanese earthquake and tsunami, neither of which resulted in anything of material consequence, gave the market a chance to prove its resilience yet again.

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All,

TSP Market Watch is under construction, but should be back online soon.

Thank you.