12/13/12
Another sell-off on Wall Street yesterday as the wild swings continue. The indices are still consolidating and the good news for now is, support is hanging on. The Dow lost 163-points.
For the TSP, the C-fund fell 1.49% Monday, the S-fund lost 1.61%, the I-fund dropped 2.26%, and the F-fund (bonds) gained 0.17%.
We did see a little rally into the close taking the indices off their lows, and that brought the S&P 500 back above all of the major EMA's, but we would really like to see a bounce off of these support levels because the more it knocks, the sooner the trap door could be opened.
The larger bull flag has already broken to the upside and the top of it is now acting as support and appears to be the lower end of a new smaller bull flag.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq also closed well of its low but is just barely hanging on to the EMA's. The concern is the open gaps down below. The fact that the gaps have remained open for two plus weeks already could be a positive for the short term, but eventually these will likely get filled... Maybe in 2012 if the bulls are lucky.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Besides the saga in Europe, some lowered guidance from Intel had a big negative impact on the market yesterday. Unfortunately, history suggests that it is not a great sign going forward, particularly in the short-term.
Chart provided courtesy of www.sentimentrader.com
More weakness in the euro, led to strength in the dollar yesterday, helping to push the stock indices lower. The strength in the dollar has been surprising, but we are seeing a small bear flag forming, coming off what looks like a double top. The 79-80 area will be an important test. A breakdown from the flag would most likely be bullish for stocks.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The yield on the 10-year T-note is also in a flag formation, a bull flag, which is another positive sign for stocks, should the flag behave the way a bull flag is supposed to behave.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
When yields rise, the price of bonds and the F-fund fall, and that usually means people are buying stocks. We'll see.
This is options expiration week and despite the historical weakness between the 5th and 11th trading day in December, option expiration week is historically positive for stocks. It has been positive 83% of the time (24 out of 29 years), averaging +1.4%. If Monday started with a loss of more than -1%, as we saw yesterday, then the rest of the week was positive 3 out of 3 times, averaging +3.2%. If Monday started with a loss of any amount, then the rest of the week was positive 8 out of 8 times, averaging +2.4%.
Today is an FOMC meeting day. The S&P 500 has lost -1.4% or more the day before a FOMC meeting 9 times. It rose the day of the meeting 6 of the 9 times, averaging +1.0%. The three losers were all small (-0.1%, -0.3% and -0.3%).
Obviously we have some mixed currents for the rest of the week. I'm leaning toward being bullish as long as the EMA's hold up.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
Another sell-off on Wall Street yesterday as the wild swings continue. The indices are still consolidating and the good news for now is, support is hanging on. The Dow lost 163-points.
For the TSP, the C-fund fell 1.49% Monday, the S-fund lost 1.61%, the I-fund dropped 2.26%, and the F-fund (bonds) gained 0.17%.
We did see a little rally into the close taking the indices off their lows, and that brought the S&P 500 back above all of the major EMA's, but we would really like to see a bounce off of these support levels because the more it knocks, the sooner the trap door could be opened.
The larger bull flag has already broken to the upside and the top of it is now acting as support and appears to be the lower end of a new smaller bull flag.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq also closed well of its low but is just barely hanging on to the EMA's. The concern is the open gaps down below. The fact that the gaps have remained open for two plus weeks already could be a positive for the short term, but eventually these will likely get filled... Maybe in 2012 if the bulls are lucky.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Besides the saga in Europe, some lowered guidance from Intel had a big negative impact on the market yesterday. Unfortunately, history suggests that it is not a great sign going forward, particularly in the short-term.
Chart provided courtesy of www.sentimentrader.com
More weakness in the euro, led to strength in the dollar yesterday, helping to push the stock indices lower. The strength in the dollar has been surprising, but we are seeing a small bear flag forming, coming off what looks like a double top. The 79-80 area will be an important test. A breakdown from the flag would most likely be bullish for stocks.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The yield on the 10-year T-note is also in a flag formation, a bull flag, which is another positive sign for stocks, should the flag behave the way a bull flag is supposed to behave.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
When yields rise, the price of bonds and the F-fund fall, and that usually means people are buying stocks. We'll see.
This is options expiration week and despite the historical weakness between the 5th and 11th trading day in December, option expiration week is historically positive for stocks. It has been positive 83% of the time (24 out of 29 years), averaging +1.4%. If Monday started with a loss of more than -1%, as we saw yesterday, then the rest of the week was positive 3 out of 3 times, averaging +3.2%. If Monday started with a loss of any amount, then the rest of the week was positive 8 out of 8 times, averaging +2.4%.
Today is an FOMC meeting day. The S&P 500 has lost -1.4% or more the day before a FOMC meeting 9 times. It rose the day of the meeting 6 of the 9 times, averaging +1.0%. The three losers were all small (-0.1%, -0.3% and -0.3%).
Obviously we have some mixed currents for the rest of the week. I'm leaning toward being bullish as long as the EMA's hold up.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
