The Dow chart below exaggerates the day's action a bit. The Dow did gain 26-points, but it was a slow, flat, tight trading range day that saw most indices end the day about where they started.
[TABLE="width: 80%, align: center"]
[TR]
[TD="width: 300"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 177"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0189%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] +0.20%[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] -0.01%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] +0.06%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] +0.25%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 69%, align: center"]
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The I-fund led the way again as we saw the dollar give back all the late Friday gains, so much of the 0.5% loss in the dollar was packed right onto the back of the I-fund.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The S&P 500 (SPY) was flat. That's three days of little action after the big pre-Christmas rally. A pause here would be healthy, but the question still remains whether it will be a flat, sideways pause, or if we'll start the New Year with a pullback.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The small caps have also paused and it is too early to tell if the recent action is an impending top, or if it a bull flag that will precede a break to new highs. New years tend to start with a bang, whether up or down, so it will be interesting to watch. The resistance is obvious as the Russell 2000 trades near the top of its rising trading channel, plus there are many indicators at extreme overbought levels so a gambler might bet their money on a pullback, but this market has been relentlessly cruel to the bears - if there are any left.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Today (Tuesday) is day -1 on this seasonality chart surrounding New Years Day.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
Here is the January seasonality chart again. Yesterday I mentioned the "January Indicator" and I did a little research to see how accurate it is.
Chart provided courtesy of www.sentimentrader.com
The theory of the January Indicator is that: As goes January, often so goes the entire year. Here's some numbers going back to 1990.
- From 1990 to 1999, 8 of 10 Januaries correctly predicted the annual outcome of the S&P 500. That is, if the S&P 500 was positive in January, then it also ended positive for that year. If the S&P 500 was negative in January, then the annual return was also negative. So it was correct 80% of the time in the 1990's.
- From 2000 to 2009, it wasn't quite as impressive. Only 6 of 10 Januaries correctly forecast the annual return.
- From 2010 to 2013, 2 of 3 Januarys were correct and one year ended exactly flat. If you use the C-fund price instead of the S&P 500 for that flat year, then it was correct 3 of 4 times.
- So from 1990 to 2013, 17 of 24 Januarys correctly predicted the positive or negative return for the S&P 500 (or C-fund) of that year.
- There were 9 negative Januaries from 1990 to 2013 and 4 of the 9 years ended negatively. That doesn't sound like a good prediction, but there were only 6 negative years from 1990 to 2013, and 4 of the 6 also had negative Januarys.
I think the take away here is that if January is negative, it is a good indication that we could see stocks struggle during the year.
Bonds rallied but only enough to take the ETFs to the bottom of some recent broken support lines.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
They are due for a rebound but that old support will now potentially act as resistance.
The TSP offices will be closed on Wednesday for New Years Day. No transactions will be processed.
In today's TSP Talk Plus Report we look at the short indicators and some extreme bull / bears ratio indicators. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Administrative Note: If you have any interest in joining the AutoTracker (if you are not already on it), or if you know someone interested, it is highly recommended that you or they do so by January 1 so that you get the full year of tracking. If you get in late your account is considered a "partial year" return. More Info.
Thanks for reading! Happy New Year, and we'll see you next year!
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.
