07/30/13
Stocks slipped yesterday on light volume. The Dow lost 37-points while the small caps, transportation, and international stocks lagged.
[TABLE="width: 88%, align: center"]
[TR]
[TD="width: 305"]
[/TD]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 161"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0177%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] -0.09%[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] -0.37%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] -0.51%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] -0.75%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
This is a big week for the markets as we get a plethora of important economic data. Today the consumer confidence number is being released, on Wednesday we get Chicago PMI, the 2nd quarter GDP number, plus the FOMC meeting and the Fed's decision on interest rates and policy.
On Friday we get the July jobs report and estimates are currently looking for a gain of 175,000 and an unemployment rate of 7.5%. Forum members can get in on the monthly Jobs Report Contest by going to: Jobs Reports & Contests
The S&P 500 saw minor losses yesterday but the SPY remained above the May high, and the action was fairly slow.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transports lost 1.2% while falling below Friday's low. It looks like a mini head and shoulders pattern has formed, which is generally bearish, although in a bull market it can often act as a continuation pattern and break to the upside, rather than the usual break bellow the neckline.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Taking a look at a monthly chart of the Russell 2000 (small caps) shows that the index is up again some serious long-term resistance. While the index could push up against this resistance for some time, the risk / reward would indicate that there is more risk on the downside in the coming months.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As usual, I am showing more charts that would backup my opinion that this market needs a break, but as I mentioned yesterday I am having a hard time finding very much wrong (which makes me nervous.) This next indicator is one of the very bullish indicators, although the situation is kind of strange.
This indicator shows that there has been a 75% increase over the last three months, in the amount of money going into inverse S&P 500 funds. That means they are bets against the market. They make money as the S&P 500 goes down. We know that excess bearishness has a strong tendency to be bullish for stocks going forward, and that is what this chart shows basically every time it has hit this 75% level (green arrows).
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
The difference this time is that all of the prior readings this high came after a significant pullback in stocks. We are getting this overly bearish action from investors while the S&P 500 is basically at all-time highs. So it looks like a very bullish reading, but the circumstances are suspect. It's hard to trust but it is not that far from what we are seeing in other sentiment-like indicators.
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 slipped yesterday on light volume. The Dow lost 37-points while the small caps, transportation, and international stocks lagged.
[TABLE="width: 88%, align: center"]
[TR]
[TD="width: 305"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 161"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0177%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] -0.09%[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] -0.37%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] -0.51%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] -0.75%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
This is a big week for the markets as we get a plethora of important economic data. Today the consumer confidence number is being released, on Wednesday we get Chicago PMI, the 2nd quarter GDP number, plus the FOMC meeting and the Fed's decision on interest rates and policy.
On Friday we get the July jobs report and estimates are currently looking for a gain of 175,000 and an unemployment rate of 7.5%. Forum members can get in on the monthly Jobs Report Contest by going to: Jobs Reports & Contests
The S&P 500 saw minor losses yesterday but the SPY remained above the May high, and the action was fairly slow.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transports lost 1.2% while falling below Friday's low. It looks like a mini head and shoulders pattern has formed, which is generally bearish, although in a bull market it can often act as a continuation pattern and break to the upside, rather than the usual break bellow the neckline.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Taking a look at a monthly chart of the Russell 2000 (small caps) shows that the index is up again some serious long-term resistance. While the index could push up against this resistance for some time, the risk / reward would indicate that there is more risk on the downside in the coming months.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As usual, I am showing more charts that would backup my opinion that this market needs a break, but as I mentioned yesterday I am having a hard time finding very much wrong (which makes me nervous.) This next indicator is one of the very bullish indicators, although the situation is kind of strange.
This indicator shows that there has been a 75% increase over the last three months, in the amount of money going into inverse S&P 500 funds. That means they are bets against the market. They make money as the S&P 500 goes down. We know that excess bearishness has a strong tendency to be bullish for stocks going forward, and that is what this chart shows basically every time it has hit this 75% level (green arrows).
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
The difference this time is that all of the prior readings this high came after a significant pullback in stocks. We are getting this overly bearish action from investors while the S&P 500 is basically at all-time highs. So it looks like a very bullish reading, but the circumstances are suspect. It's hard to trust but it is not that far from what we are seeing in other sentiment-like indicators.
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.
