Thrift Savings Plan

[frenchee]

TTT--8 Nov 05

Lighter Volume Suggests Hesitation. Today, stock prices finished mildly higher, helped by easing crude oil prices and bond yields, both of which may be only counter-trend corrections against larger uptrends. Breadth was only mildly positive. The Cumulative Daily Advance-Decline Line has recovered less than half of its loss since September peak. Lighter volume on the upmove suggests hesitation. Positive price momentum has actually been slowing over the past 3 trading sessions, despite apparent price strength. None of this suggests a sustainable uptrend. Rather, the market may remain trapped in an indecisive choppy trading range for a while longer.

Historical seasonal tendencies have been mostly bullish in the month of November. Also, recent past earnings have grown about 15% year over year, which pleases fundamental analysts. Moreover, companies have plowed some of those earnings back into hoped for future growth, in the form of mergers and acquisitions and stock buybacks. But despite these signs of good times, stock prices have only managed to hold in a relatively narrow trading range. Why? Could the good news be discounted? Or, is the good news offset by a deteriorating longer-term outlook for the economy and stock prices? If stocks cannot go up on good news, what might happen when the good news runs out, as it always does, sooner or later, as normal business cycles unfold more or less as they always do? Both the business and stock market cycles seem to be overripe for a downturn, by historical standards. I'm as nervous as a long-tailed cat in a room full of rocking chairs...

Current Action Limits & Allocation Percentages:


F Fund (Long-term Treasury Bond Index) No buy possible on 8 Nov 05. Current portfolio allocation is nil.

C Fund (S&P 500 Index) Sell C Fund if SPY is < $121.77. Current portfolio allocation is 25%.

I Fund (EAFE Index) Sell I Fund if EFA is < $57.19. Current portfolio allocation is 25%.

S Fund (Wilshire 4500 Index) Sell S Fund if $EMW or DWCP is < $529.37. Current portfolio allocation is 50%.

G Fund (Money Market) Current portfolio allocation is nil.