4/18/12
Stocks rallied sharply yesterday after some decent earnings reports, and some surprisingly strong demand for Spanish debt in a bond auction - an earlier concern. The Dow gained 194-points on the day.
For the TSP, the C-fund was up 1.55% yesterday, the S-fund gained 1.50%, the I-fund made 1.58%, and the F-fund (bonds) fell 0.12%.
The S&P 500 has been able to stay above the rising support line, the 2011 high, the 50-day EMA, and once again, the 20-day EMA. All good technical action, but there is a very clear bear flag forming.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Here's a closer look at the bear flag, and this would concern me a lot more if this was happening below the 50-day EMA, and if it was popping up throughout the other major indices, but it is not.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow had a bear flag but the big rally yesterday shows that it may have broken to the upside, where bear flags normally break down.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transportation Index has been very volatile and seems to be trading in a wide trading range, but no bear flag.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
If you squint your eyes you might be able to see a bear flag, but it just isn't very well defined. I see a consolidation above the 50-day EMA. If this breaks above the consolidation area (between 3000 and 3050), then it looks like another push toward new highs would seem logical. However if this is a bear flag, and it breaks down below the 50-day EMA, that will be enough of a negative to suggest a "correction" phase has started, as opposed to the recent modest "pullback."
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Yesterday was trading day #11 in April and it certainly lived up to historical seasonal strength. Next week, a post-options expiration week, tends to struggle a little more.
Chart provided courtesy of www.sentimentrader.com
Another little tidbit from sentimenTrader.com: "Since 1928, the day after the federal tax filing deadline was positive 61% of the time, including 10 of the last 12 years. The week following tax day was also positive 61% of the time, including 16 of the last 18 years. The two losses, in 2009 and 2010, were -1.0% and -0.3%, while the gains averaged +2.0%."
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
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