08/31/11
Stocks were a little schizophrenic yesterday as we saw the indices jump above and below the break even mark a few times before the Dow settled up 21-points.
Another weak consumer confidence report sent stocks reeling early, but investors seem to want to believe that the Fed still has QE3 on the table, and that kept buyers in the game. QE2 triggered a big rally in 2010 so folks are trying to jump in front of any news.
For the TSP, the C-fund was up 0.25% yesterday, the S-fund gained 0.49%, the I-fund lost 0.45%, and the F-fund (bonds) were up 0.42%.
The S&P 500 moved above the prior August peak, but like the Russell 2000 chart that I posted yesterday, there is now a large bear flag on the S&P chart. We did get a PMO buy signal this week (PMO moved above its 10 day EMA), but volume during this rally has been anemic, mainly because of the summer vacations on Wall Street, but also because the big money doesn't seem to be embracing the rally yet.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
We are seeing many of the short-term indicators getting overbought.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
But not so for the more intermediate -term indicators. That makes sense to me since I am expecting another test of the lows before this market bottoms, but I am also leaning toward the lows holding and being a good buying opportunity, if and when we do test the lows.
With the low volume holiday trading in full force, it is tough to do much analysis. One thing we have talked about is the tendency for markets to go against the trend prior to a holiday, and reverse back after the holiday so I am less than enthusiastic for the prospects of next week, but I also know the power of momentum and if the bulls can keep it up, the bears may not want to step in the way until the indices lose steam.
Administrative Note: I am starting a "Last Man Standing" NFL football pool. It's real easy and it's free. For more info see TSP Talk NFL Pool.
Thanks for reading! We'll see you back here tomorrow.
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 were a little schizophrenic yesterday as we saw the indices jump above and below the break even mark a few times before the Dow settled up 21-points.
Another weak consumer confidence report sent stocks reeling early, but investors seem to want to believe that the Fed still has QE3 on the table, and that kept buyers in the game. QE2 triggered a big rally in 2010 so folks are trying to jump in front of any news.
For the TSP, the C-fund was up 0.25% yesterday, the S-fund gained 0.49%, the I-fund lost 0.45%, and the F-fund (bonds) were up 0.42%.
The S&P 500 moved above the prior August peak, but like the Russell 2000 chart that I posted yesterday, there is now a large bear flag on the S&P chart. We did get a PMO buy signal this week (PMO moved above its 10 day EMA), but volume during this rally has been anemic, mainly because of the summer vacations on Wall Street, but also because the big money doesn't seem to be embracing the rally yet.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
We are seeing many of the short-term indicators getting overbought.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
But not so for the more intermediate -term indicators. That makes sense to me since I am expecting another test of the lows before this market bottoms, but I am also leaning toward the lows holding and being a good buying opportunity, if and when we do test the lows.
With the low volume holiday trading in full force, it is tough to do much analysis. One thing we have talked about is the tendency for markets to go against the trend prior to a holiday, and reverse back after the holiday so I am less than enthusiastic for the prospects of next week, but I also know the power of momentum and if the bulls can keep it up, the bears may not want to step in the way until the indices lose steam.
Administrative Note: I am starting a "Last Man Standing" NFL football pool. It's real easy and it's free. For more info see TSP Talk NFL Pool.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
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.
