2/08/12
After a weak opening, we saw another modest, light volume rally yesterday as another day goes by without a pullback. Amazingly, it was more news out of Greece that reversed the early downside. Has it been 2 years now that we have played this game? The Dow gained 33-points.
For the TSP, the C-fund was up 0.21% yesterday, the S-fund added 0.03%, the I-fund gained 0.69%, and the F-fund (bonds) fell 0.19%.
The action is relentless and we have seen in the past that these moves can last quite a while. It is tough to chase if you are on the sidelines, and we know a pullback will come eventually, but unless we get some kind of news to shake things up, based on our recent sentiment survey results, I think the buyers might keep coming in.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As I said, this kind of slow climb has happened before and of course, our friends at sentimenTrader.com have some stats to share:
"...We're looking for those times when the market was at a multi-month extreme, but not at multi-year highs. These give us intermediate highs that aren't necessarily comparable to times when the market was making all-time highs.
"Also, the S&P 500 had to have gone at least a month, 21 trading days, without suffering more than a -0.6% loss, as it has done this time. Actually, it has gone 27 days, but we're only requiring 21 here.
"The results are impressive.
"In the shorter-term, the S&P's returns were good, but between 3-6 months, they were fantastic. Losses were rare, and average returns were 2 to 3 times greater than random."
- Jason (sentimentrader.com)
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
And some of us are still fighting it.
A little follow up on the dollar, which we talked about yesterday. The 200-day EMA was broken yesterday so, with the 20-day EMA recently moving below the 50-day EMA, this chart is not looking too good technically.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
And, as a follow up to how this might benefit gold: Gold was up over $26 an ounce yesterday.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
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