Nothing yet
The market has been remarkably resilient despite the inability of our leaders in Washington to come to an agreement on the debt ceiling, and the deadline is quickly approaching.
The indices were mixed on Friday as the Dow lost 43-points on Friday, but the Nasdaq was up nearly 1%, and the S&P 500 saw minor gains.
For the TSP, all of the finds closed in positive territory on Friday. The C-fund gained 0.09%, the S-fund was up 0.28%, the I-fund made 0.73%, and the F-fund (bonds) was up 0.23%. For more on the weekly and monthly returns, please see our TSP Weekly Wrap-Up.
As I write this on Sunday evening, the early futures quotes look to be taking the lack of a weekend deal in Washington negatively as we are seeing 1% losses across the board. As was the case last week, emotional Monday morning openings are not something to hang your hat on. It happened last week as well, and buying that weakness resulted in some decent gains for the rest of week.
I'm not advocating buying today. I am on the sidelines myself, thanks mostly to the defensive allocations of our premium services. Based on the charts I am actually still bullish on the market, but I guess we should let the dust settle on this debt debate before getting too aggressive. I can see buying again at some point this week, however.
The S&P 500 is telling a bullish story, although the index is again testing that pesky resistance near 1350. As I wrote about in the Weekly Wrap-Up, there is a new inverted head and shoulders pattern that will likely look to either break above the neckline resistance, or pull back to test the head as we saw earlier in the year.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
But through all of this mess and volatility in the market over the last several months, the charts don't look all that bad. At least the S&P 500 doesn't.
The Nasdaq 100, which contains the top U.S. technical stocks, moved above the high it had made earlier in the month. You remember that parabolic two-week rally we had, don't you? The market took a week or so off, and here the Naz 100 is back above those levels.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Last Tuesday we looked at some charts that were starting to fail and I had said that they needed to rally quickly or it was going to be a technical breakdown. My exact words were:
"With so many indices starting to break down, and others barely above support, the rest of this week is very important for the intermediate-term, in my opinion. We could see an all out breakdown, or we could see a sharp "V" shaped rebound in this critical area. All we can do is wait."
Well, we have seen the latter...
Since then, the Dow Transportation rebounded nicely off of the EMA and key support levels...
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The semiconductor index moved up sharply, but it is now testing the 50 and 200-day EMA's. A failure here would be a lower low followed by a lower high so they are not out of the woods yet.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The banking stocks did the same...
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As did the Housing Index...
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
So, from a technical standpoint, many of the indices have bounced nicely, but they are up against resistance. Another key week ahead and it doesn't look like it is going to start out very well.
The good news is that the S&P 500 looks fine, and the leaders, the Nasdaq and Dow Transportation Index, are in good shape as well.
The market could get pushed around very easily this week with each rumor, press conference, and each yea or nay coming out of D.C. Put your seatbelts and helmets on and prepare for some action. I still like the idea of buying any emotional sell-offs during the week, but I will try to use some patience.
I do have an IFT left to use to buy this month, and of course the free sell IFT's into the G-fund, but with the limits in place I can't do what I normally like to do in situations like this where a volatile market sells off hard on emotional news, and that is to buy in slowly (10% to 25% at a time) instead of all at once. That has become a thing of the past for us. The best we can do with our 2 IFT's is to buy twice during the month. The limits have certainly put an added emphasis on strategy as each move has less room for error. Of course you can be a buy and holder and ride the rollercoaster if you like. That's not for me.
The TSP Talk Sentiment Survey came in at 54% bulls, 34% bears, for a bulls to bears ratio of 1.59 to 1. That is a neutral reading so the system's allocation remains 100% S-Fund for this week. The system is up 10% for 2011 through Friday's close.
Thanks for reading! Well see you back here tomorrow.
Tom Crowley
The market has been remarkably resilient despite the inability of our leaders in Washington to come to an agreement on the debt ceiling, and the deadline is quickly approaching.
The indices were mixed on Friday as the Dow lost 43-points on Friday, but the Nasdaq was up nearly 1%, and the S&P 500 saw minor gains.
For the TSP, all of the finds closed in positive territory on Friday. The C-fund gained 0.09%, the S-fund was up 0.28%, the I-fund made 0.73%, and the F-fund (bonds) was up 0.23%. For more on the weekly and monthly returns, please see our TSP Weekly Wrap-Up.
As I write this on Sunday evening, the early futures quotes look to be taking the lack of a weekend deal in Washington negatively as we are seeing 1% losses across the board. As was the case last week, emotional Monday morning openings are not something to hang your hat on. It happened last week as well, and buying that weakness resulted in some decent gains for the rest of week.
I'm not advocating buying today. I am on the sidelines myself, thanks mostly to the defensive allocations of our premium services. Based on the charts I am actually still bullish on the market, but I guess we should let the dust settle on this debt debate before getting too aggressive. I can see buying again at some point this week, however.
The S&P 500 is telling a bullish story, although the index is again testing that pesky resistance near 1350. As I wrote about in the Weekly Wrap-Up, there is a new inverted head and shoulders pattern that will likely look to either break above the neckline resistance, or pull back to test the head as we saw earlier in the year.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
But through all of this mess and volatility in the market over the last several months, the charts don't look all that bad. At least the S&P 500 doesn't.
The Nasdaq 100, which contains the top U.S. technical stocks, moved above the high it had made earlier in the month. You remember that parabolic two-week rally we had, don't you? The market took a week or so off, and here the Naz 100 is back above those levels.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Last Tuesday we looked at some charts that were starting to fail and I had said that they needed to rally quickly or it was going to be a technical breakdown. My exact words were:
"With so many indices starting to break down, and others barely above support, the rest of this week is very important for the intermediate-term, in my opinion. We could see an all out breakdown, or we could see a sharp "V" shaped rebound in this critical area. All we can do is wait."
Well, we have seen the latter...
Since then, the Dow Transportation rebounded nicely off of the EMA and key support levels...
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The semiconductor index moved up sharply, but it is now testing the 50 and 200-day EMA's. A failure here would be a lower low followed by a lower high so they are not out of the woods yet.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The banking stocks did the same...
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As did the Housing Index...
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
So, from a technical standpoint, many of the indices have bounced nicely, but they are up against resistance. Another key week ahead and it doesn't look like it is going to start out very well.
The good news is that the S&P 500 looks fine, and the leaders, the Nasdaq and Dow Transportation Index, are in good shape as well.
The market could get pushed around very easily this week with each rumor, press conference, and each yea or nay coming out of D.C. Put your seatbelts and helmets on and prepare for some action. I still like the idea of buying any emotional sell-offs during the week, but I will try to use some patience.
I do have an IFT left to use to buy this month, and of course the free sell IFT's into the G-fund, but with the limits in place I can't do what I normally like to do in situations like this where a volatile market sells off hard on emotional news, and that is to buy in slowly (10% to 25% at a time) instead of all at once. That has become a thing of the past for us. The best we can do with our 2 IFT's is to buy twice during the month. The limits have certainly put an added emphasis on strategy as each move has less room for error. Of course you can be a buy and holder and ride the rollercoaster if you like. That's not for me.
The TSP Talk Sentiment Survey came in at 54% bulls, 34% bears, for a bulls to bears ratio of 1.59 to 1. That is a neutral reading so the system's allocation remains 100% S-Fund for this week. The system is up 10% for 2011 through Friday's close.
Thanks for reading! Well see you back here tomorrow.
Tom Crowley
