1/10/12
The market got a bounce yesterday as the consolidation continues after the 2-day, 475-point, rally on Dec. 31 and Jan. 2. The Dow gained 62-points on the day.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 151"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]0.0036%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]0.06%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]0.27%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]0.61%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]0.40%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The consolidation in the S&P 500, and many of the other indices, has created a bull flag which of course is a bullish formation. But by now we're all aware that there are open gaps below on many charts that will eventually get filled, and the indices are still well above the EMA's (20, 50, and 200) and that is part of the process of being overbought.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq has the most pronounced open gap, but it also has one of the nicest bulls flags. The fact that yesterday produced a higher high and a higher low on the chart compared to Tuesday's action is positive, but until we see new highs we won't consider this a bull flag breakout.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transportation Index was up 1% yesterday and it did make a new high, but not by much so I'm reluctant to call it a breakout yet.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The VIX (Volatility Index) has sunk dramatically since the December 31st rally, and yesterday hit its lowest point in over a year, but reversed higher and closed up 1%.
sentimenTrader.com shows us what happened to the S&P 500 after such an occurrence going back to 1992...
Chart provided courtesy of www.sentimentrader.com
There was some short-term weakness but overall it was actually more of a bullish sign than bearish. So, as long as the debt ceiling fiasco doesn't send the market reeling, it looks like any dips in the near future may produce a good buying opportunity.
If you recall I have been saying that buying opportunities could be tough since many folks missed the big rally at the beginning of the year, and they will likely take advantage of any dips keeping any pullbacks on the tepid side.
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.
The market got a bounce yesterday as the consolidation continues after the 2-day, 475-point, rally on Dec. 31 and Jan. 2. The Dow gained 62-points on the day.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 151"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]0.0036%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]0.06%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]0.27%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]0.61%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]0.40%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The consolidation in the S&P 500, and many of the other indices, has created a bull flag which of course is a bullish formation. But by now we're all aware that there are open gaps below on many charts that will eventually get filled, and the indices are still well above the EMA's (20, 50, and 200) and that is part of the process of being overbought.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq has the most pronounced open gap, but it also has one of the nicest bulls flags. The fact that yesterday produced a higher high and a higher low on the chart compared to Tuesday's action is positive, but until we see new highs we won't consider this a bull flag breakout.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transportation Index was up 1% yesterday and it did make a new high, but not by much so I'm reluctant to call it a breakout yet.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The VIX (Volatility Index) has sunk dramatically since the December 31st rally, and yesterday hit its lowest point in over a year, but reversed higher and closed up 1%.
sentimenTrader.com shows us what happened to the S&P 500 after such an occurrence going back to 1992...
Chart provided courtesy of www.sentimentrader.com
There was some short-term weakness but overall it was actually more of a bullish sign than bearish. So, as long as the debt ceiling fiasco doesn't send the market reeling, it looks like any dips in the near future may produce a good buying opportunity.
If you recall I have been saying that buying opportunities could be tough since many folks missed the big rally at the beginning of the year, and they will likely take advantage of any dips keeping any pullbacks on the tepid side.
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.
