Good evening, TSPwire Tactical Investor!

Des[ite widespread expectations for mediocre third quarter earnings report in the weeks ahead, many Wall Street pros believe the stock market can head higher. In essence, they are betting that investors will be willing to pay more for each dollar of earnings. The outlook for some companies is bleak. Experts, who track earnings expectations, say that S&P 500 index (C Fund) could be flat once all the third period's reports are in hand. Nevertheless, traders and analysts who believe the rally can continue point to relatively cheap stock prices compared with profit. The S&P 500 (C Fund) is now trading  at about 15 times the expected earnings of its component companies over the next 12 months compared with more then 20 times during the record run in 2000.

This week our models yielded same results. I and C Funds got the best scores and finished with STRONG BUY signal. S Fund came third with a BUY and F Fund finished last with STRONG SELL signal. After all considerations we decided to keep our allocation at 50/50 levels in C and I Funds.