9/20/12
Stocks were flat to slightly higher yesterday with the Dow gaining 13-points on the day, and the major indices were up between 0.01% and 0.03%.
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[TD="width: 241"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 154"]
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[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] 0.0029%[/TD]
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[TD="align: right"] F-fund:[/TD]
[TD="align: right"] 0.13%[/TD]
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[TD="align: right"] C-fund:[/TD]
[TD="align: right"] 0.12%[/TD]
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[TD="align: right"] S-fund:[/TD]
[TD="align: right"] 0.15%[/TD]
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[TD="align: right"] I-fund:[/TD]
[TD="align: right"] 0.63%[/TD]
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[TD="align: right"] [/TD]
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The S&P 500 is either making an awkward flag, or possibly another consolidation like we saw throughout August. Hard to say.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Transports broke below the major moving averages in early trading on Wednesday, but snapped back after the housing data was released and recovered to close the day back above the 50 and 200-day EMA's.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
It could be a positive reversal day but it did not close near the highs so that takes a little away from the reversal pattern. It is basically back in the middle of the 4950 - 5250 trading range so it doesn't tell us much yet.
The dollar isn't exactly snapping back after the recent sharp decline. It looks like the UUP could be forming a little bear flag. There are still two large open gaps overhead which I assume will get filled in the not so distant future, but this is clearly in a downtrend - which is a shot in the arm for stocks - at least until those gaps start to get filled.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dumb money of the CBOE put/call ratio is very bullish - which could be bearish. We have seen readings this high (high on the chart - which is low in ratio number), but I noticed that when that happens at the end of the year or the beginning (Dec - Jan) it's not always bearish.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
But when this put / call ratio is at this level mid-year, once in 2009 and twice in 2010, we saw pullbacks almost immediately.
The election could be throwing off all of our past data analysis so I am having a tough time reading the tea leaves. We see some shaky indicators, but the chart formations look pretty good for the most part. Because of the latter, it is hard to get too bearish, but the dumb money seems bullish enough that they may be running out of steam and we could see more consolidation.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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