12/18/12
Stocks opened and closed strongly yesterday kicking off what the bulls are hoping is this year's Santa Claus rally. The Dow gained 100-points closing near the highs of the day.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 148"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]0.0114%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]-0.19%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]1.19%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]1.09%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]0.29%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 is still working on that right shoulder of an inverted head and shoulders pattern and it looks like 1440 area may need to be hit to break through to the next layer of resistance.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
We have been watching Apple since it is such a big part of the Nasdaq indices, and of course the Nasdaq is one of the market leaders so it is almost a must that it do well if the rest of the market is going to follow.
Apple bounced off of the psychological 500 level yesterday - holding above some very key support for now. That is a nasty looking head and shoulders pattern and if the neckline near 500 is taken out, there is a lot of room for it to fall. If it falls, the Nasdaq will certainly follow. And if the Nasdaq falls, look for the S&P 500 to struggle as well.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The big market leader is the economically sensitive Dow Transportation Index. It moved above the 5200 level for a 5th straight day yesterday, but this time it finally closed above it, which is the highest closing price since early July.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
That is a good sign but in order for it to truly breakout, well want to see it get above the 5240 area, which has stubbornly held since those highs back in June and July.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Seasonality is on the side of seeing those new highs as the market enters the strongest two to three week period of the year - late December to early January.
Today is the 12th trading day in December and although day 13 and 14 have actually been down more often than up over the last 60+ years, every day between today and the 3rd trading day in January have a positive average return since 1950.
Chart provided courtesy of www.sentimentrader.com
The dollar remains in a downtrend after making a lower low last week, but yesterday the UUP held at the intermediate term support line.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The strength of any Santa Claus rally may depend on whether the dollar holds or breaks that support. Breaking that support would help stocks.
Momentum may have shifted to the bullish side, but based on the overhead resistance in the S&P and Transportation Index, the support on the UUP (dollar), the slight weakness on the seasonality chart for trading days 13 & 14, and yesterday's 100-point rally, we might see stocks tread water for a couple of days... unless you believe in Santa Claus [rallies]. But whether that happens or not, the charts look pretty good and I wouldn't bet too much against the market into the rest of the year. Oh wait! What about the fiscal cliff and the capital gains selling? It's never easy, is it?
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 opened and closed strongly yesterday kicking off what the bulls are hoping is this year's Santa Claus rally. The Dow gained 100-points closing near the highs of the day.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 148"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]0.0114%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]-0.19%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]1.19%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]1.09%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]0.29%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 is still working on that right shoulder of an inverted head and shoulders pattern and it looks like 1440 area may need to be hit to break through to the next layer of resistance.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
We have been watching Apple since it is such a big part of the Nasdaq indices, and of course the Nasdaq is one of the market leaders so it is almost a must that it do well if the rest of the market is going to follow.
Apple bounced off of the psychological 500 level yesterday - holding above some very key support for now. That is a nasty looking head and shoulders pattern and if the neckline near 500 is taken out, there is a lot of room for it to fall. If it falls, the Nasdaq will certainly follow. And if the Nasdaq falls, look for the S&P 500 to struggle as well.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The big market leader is the economically sensitive Dow Transportation Index. It moved above the 5200 level for a 5th straight day yesterday, but this time it finally closed above it, which is the highest closing price since early July.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
That is a good sign but in order for it to truly breakout, well want to see it get above the 5240 area, which has stubbornly held since those highs back in June and July.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Seasonality is on the side of seeing those new highs as the market enters the strongest two to three week period of the year - late December to early January.
Today is the 12th trading day in December and although day 13 and 14 have actually been down more often than up over the last 60+ years, every day between today and the 3rd trading day in January have a positive average return since 1950.
Chart provided courtesy of www.sentimentrader.com
The dollar remains in a downtrend after making a lower low last week, but yesterday the UUP held at the intermediate term support line.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The strength of any Santa Claus rally may depend on whether the dollar holds or breaks that support. Breaking that support would help stocks.
Momentum may have shifted to the bullish side, but based on the overhead resistance in the S&P and Transportation Index, the support on the UUP (dollar), the slight weakness on the seasonality chart for trading days 13 & 14, and yesterday's 100-point rally, we might see stocks tread water for a couple of days... unless you believe in Santa Claus [rallies]. But whether that happens or not, the charts look pretty good and I wouldn't bet too much against the market into the rest of the year. Oh wait! What about the fiscal cliff and the capital gains selling? It's never easy, is it?
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.
