2/28/12
Stocks opened sharply lower on Monday but buyers quickly stepped up after the release of some positive housing data, and the indices basically treaded water the rest of the day. The Dow had been down about 100-points in early trading but closed down just 1-point.
For the TSP, the C-fund was up 0.15% yesterday, the S-fund slipped 0.01%, the I-fund fell 0.45%, and the F-fund (bonds) gained 0.23%.
The Dow teased the 13,000 cheerleaders as it traded above and below that number before closing just below it. The S&P 500 temporarily pushed above the 2011 high but could not close above it. The close will be important, and as some of you ay remember, I like to see at least 3 closes above a breakout before accepting it.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
I hate to do it, but we'll probably be dwelling on the price of oil until it gets back below the $100 level. The chart below looks very bullish for oil although we could see a move down to the neckline for a test of the inverted head and shoulders breakout. Yesterday we saw a pullback to about $108.
There is actually a smaller inverted H&S (blue) within the right shoulder of the larger inverted H&S (red), and that makes this a stronger bullish signal.
The larger one may be following the more common inverted H&S pattern (shown in the above example on the left), while the smaller inverted H&S looks to have tested the middle of the head before breaking out (example on above right.) Either one you choose, it looks like high prices are on the way. If the technical analysis works, we'll probably see a move to $115 before seeing $100 again.
FYI, normally the jobs report is reported on the first Friday of the month, which would be this coming Friday, but for some reason it is scheduled for the 2nd Friday this month, March 9. I haven't seen any estimates yet but if you recall, the monthly Gallop poll suggested the unemployment rate may creep back up toward 9%. It was 8.3% in January and has gone down every month since August, so 9% could trigger some uneasiness in the markets.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
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