04/19/13
Stocks opened higher yesterday, but the gains did not last long as the Dow quickly moved into negative territory, and closed down 81-points. The results were about the same across the indices with losses in the area of about one half of one percent.
[TABLE="align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 152"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0035%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] +0.06%[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] -0.67%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] -0.61%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] -0.39%[/TD]
[/TR]
[/TABLE]
[TABLE="align: center"]
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The SPY (S&P 500 ETF) briefly fell below the 50-day EMA before closing above it, but it did close below the 50-day "Simple" moving average, which many traders use, for the first time this year. Below we'll show why that is significant.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The blue trading channel on the S&P 500 index broke down on Wednesday and yesterday (Thursday) it fell to the bottom of the larger red trading channel. You can see that there isn't a heck of a lot of support if the 50-day EMA and that red support line break. The 200-day EMA is 100-points below current levels.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq made a lower low yesterday, moving below the prior April low.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq is a leading index, as are the small caps and the Dow Transportation Index, and all three have now moved below their 50-day simple moving averages.
These two charts below tell us why it is important that the leaders (The Transports are not included here) outperform the S&P 500 if we want to see the S&P hold up.
Chart provided courtesy of www.sentimentrader.com
Chart provided courtesy of www.sentimentrader.com
The results are significantly weaker for the S&P 500 when the leaders are lagging.
Bond prices look to be hitting a double top. The resistance will either hold or it won't and it would seem logical that if the TLT bond ETF breaks above resistance, we would see stocks move lower.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
If the TLT pulls back from here, stock would likely rebound some. I'm not sure of the timeframe. Double tops can be just temporary slow downs, and the fact that the TLT pulled back earlier this month could be enough reason for it to have the strength to break above the resistance.
Bigger name earnings were reported after the bell last night and IBM was a disappointment that could hurt stocks, and the Dow in particular on Friday.
Next week is post-options week and Monday will be the 16th trading day in April.
Chart provided courtesy of www.sentimentrader.com
It is probably an earnings and post-options week thing, because this next week is historically below average.
Thanks for reading! Have a great weekend!
Tom Crowley
Posted daily at www.tsptalk.com/comments.html
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 opened higher yesterday, but the gains did not last long as the Dow quickly moved into negative territory, and closed down 81-points. The results were about the same across the indices with losses in the area of about one half of one percent.
[TABLE="align: center"]
[TR]
[TD]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 152"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0035%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] +0.06%[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] -0.67%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] -0.61%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] -0.39%[/TD]
[/TR]
[/TABLE]
[TABLE="align: center"]
[TR]
[TD="align: right"][/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The SPY (S&P 500 ETF) briefly fell below the 50-day EMA before closing above it, but it did close below the 50-day "Simple" moving average, which many traders use, for the first time this year. Below we'll show why that is significant.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The blue trading channel on the S&P 500 index broke down on Wednesday and yesterday (Thursday) it fell to the bottom of the larger red trading channel. You can see that there isn't a heck of a lot of support if the 50-day EMA and that red support line break. The 200-day EMA is 100-points below current levels.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq made a lower low yesterday, moving below the prior April low.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq is a leading index, as are the small caps and the Dow Transportation Index, and all three have now moved below their 50-day simple moving averages.
These two charts below tell us why it is important that the leaders (The Transports are not included here) outperform the S&P 500 if we want to see the S&P hold up.
Chart provided courtesy of www.sentimentrader.com
Chart provided courtesy of www.sentimentrader.com
The results are significantly weaker for the S&P 500 when the leaders are lagging.
Bond prices look to be hitting a double top. The resistance will either hold or it won't and it would seem logical that if the TLT bond ETF breaks above resistance, we would see stocks move lower.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
If the TLT pulls back from here, stock would likely rebound some. I'm not sure of the timeframe. Double tops can be just temporary slow downs, and the fact that the TLT pulled back earlier this month could be enough reason for it to have the strength to break above the resistance.
Bigger name earnings were reported after the bell last night and IBM was a disappointment that could hurt stocks, and the Dow in particular on Friday.
Next week is post-options week and Monday will be the 16th trading day in April.
Chart provided courtesy of www.sentimentrader.com
It is probably an earnings and post-options week thing, because this next week is historically below average.
Thanks for reading! Have a great weekend!
Tom Crowley
Posted daily at www.tsptalk.com/comments.html
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.
