1/23/13
Stocks rallied again yesterday and ironically, this type of straight up action can be nerve wracking for both the bulls and the bears. The Dow gained 63-points and things got better after the close.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 151"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]0.0171%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]0.06%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]0.45%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]0.73%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]0.27%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
Strong earnings reports from some big tech companies sent the futures higher after the market close yesterday, but before the futures market closed, so look for a fair value addition of about 45 Dow points on top of the morning futures quotes.
For the last year the S&P 500 has had its share of choppiness, but the wider trading channels have been strong and currently, the S&P is in one of the strong rising trading channels. That said, there is a lot of room on the downside in this current wide channel. That is one reason I am watching the more narrow trading channel for signs of weakness. So far we haven't seen it.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Undoubtedly this more narrow trading channel will break since the support is above both the 20 and 50 day EMA's, but we've seen runs like this last a long time so I don't want to act too prematurely.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
We had a rally like this back in 2006 into 2007, and in February 2007 the rally came to an abrupt end.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
This is something we have to understand can happen, and this one came after a sharp drop in China's Shanghai Index so most of us didn't see it coming, but of course the indicators were very overbought at the time. If you were able to miss a drop like that, you were probably missing a lot of the upside that led up to it. That's the situation we're in now. If you are preparing for a large drop, you've probably missed a good chunk of this current rally.
The market leaders are mixed with the Dow Transportation Index in near parabolic mode; having risen over 19% since mid-November...
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Same for the small caps of the Russell 2000, which is up 18% during that time.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq, on the other hand, has made virtually no gains since the January 2nd rally, and that is almost entirely because of the drop the the price of Apples stock.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
But after the close yesterday, the earnings reports from IBM and Google, may be enough to trigger the tech stocks to finally breakout and join the other indices.
This could keep the stock market rally going a while longer, but of course we will see a few negative days here and there. This is why I said both the bulls and bears are nervous since we all know the market does not go up every day. We all want to know how the indices and investors will react when we get some weakness or bad news. Just keep an eye on the short-term support lines for the first signs of trouble.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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.
Stocks rallied again yesterday and ironically, this type of straight up action can be nerve wracking for both the bulls and the bears. The Dow gained 63-points and things got better after the close.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 151"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]0.0171%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]0.06%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]0.45%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]0.73%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]0.27%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
Strong earnings reports from some big tech companies sent the futures higher after the market close yesterday, but before the futures market closed, so look for a fair value addition of about 45 Dow points on top of the morning futures quotes.
For the last year the S&P 500 has had its share of choppiness, but the wider trading channels have been strong and currently, the S&P is in one of the strong rising trading channels. That said, there is a lot of room on the downside in this current wide channel. That is one reason I am watching the more narrow trading channel for signs of weakness. So far we haven't seen it.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Undoubtedly this more narrow trading channel will break since the support is above both the 20 and 50 day EMA's, but we've seen runs like this last a long time so I don't want to act too prematurely.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
We had a rally like this back in 2006 into 2007, and in February 2007 the rally came to an abrupt end.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
This is something we have to understand can happen, and this one came after a sharp drop in China's Shanghai Index so most of us didn't see it coming, but of course the indicators were very overbought at the time. If you were able to miss a drop like that, you were probably missing a lot of the upside that led up to it. That's the situation we're in now. If you are preparing for a large drop, you've probably missed a good chunk of this current rally.
The market leaders are mixed with the Dow Transportation Index in near parabolic mode; having risen over 19% since mid-November...
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Same for the small caps of the Russell 2000, which is up 18% during that time.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq, on the other hand, has made virtually no gains since the January 2nd rally, and that is almost entirely because of the drop the the price of Apples stock.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
But after the close yesterday, the earnings reports from IBM and Google, may be enough to trigger the tech stocks to finally breakout and join the other indices.
This could keep the stock market rally going a while longer, but of course we will see a few negative days here and there. This is why I said both the bulls and bears are nervous since we all know the market does not go up every day. We all want to know how the indices and investors will react when we get some weakness or bad news. Just keep an eye on the short-term support lines for the first signs of trouble.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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.
