Stocks were up modestly yesterday, which is a good sign considering the profit taking that could have been done. The I-fund led the way as the dollar pulled back.
We've seen several one and two-day rallies during this bear market, so the test comes today and tomorrow for this rebound.
The S&P 500 moved up yesterday, just barely missing filling up the open gap at 734 (it hit 732). It is also getting closer to the 741 breakdown level that should now act as resistance.
We saw a very similar move in September; a breakdown followed by a reversal on very high volume, that did not last very long. Of course the difference is that the major indices weren't already down over 50% from theirs peaks, as they are now.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The NYSE overbought/oversold indicator is now back near the neutral level, the level we thought could could give any rally a decent test.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Oil is an indicator itself in a way. When oil demand is high, it is usually an indication of a strong global economy. When the price of oil fell off of a cliff during the second half of 2008, it was because the global demand for oil dipped sharply, and was a result of the economic slowdown.
Looking at a long term chart of oil, you can see that the decline has found some support on the multiyear lower trend line. This is a good sign, at least temporary, that perhaps the demand for oil has stabilized, and that could possibly indicates that the economy could also stabilize.
The chart of the dollar looks like a massive head and shoulders pattern to me, which is a bearish sign. The current rally is a test of the right shoulder. With oil being a commodity, it would benefit if the the dollar does fall, and that could be what is setting up.
Charts provided courtesy of www.decisionpoint.com, analysis by TSP Talk
With the Fed giving money away so freely lately, the value of the dollar is in jeopardy, and it may cause massive inflation down the road. The way things are heading, I can see a trend of higher oil prices and a lower dollar for many years to come. This would not be a terrible thing for stocks, however.
Today we get the initial jobless claims and the retail sales reports. These both have the ability to be market movers. Which way will it go? The way the charts are setting up, I would have to lean toward a negative reaction. With two up days already on the scoreboard, this rally may need some help to keep it going.
That's all for today. Thanks for reading. See you back here tomorrow!
We've seen several one and two-day rallies during this bear market, so the test comes today and tomorrow for this rebound.
The S&P 500 moved up yesterday, just barely missing filling up the open gap at 734 (it hit 732). It is also getting closer to the 741 breakdown level that should now act as resistance.
We saw a very similar move in September; a breakdown followed by a reversal on very high volume, that did not last very long. Of course the difference is that the major indices weren't already down over 50% from theirs peaks, as they are now.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The NYSE overbought/oversold indicator is now back near the neutral level, the level we thought could could give any rally a decent test.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Oil is an indicator itself in a way. When oil demand is high, it is usually an indication of a strong global economy. When the price of oil fell off of a cliff during the second half of 2008, it was because the global demand for oil dipped sharply, and was a result of the economic slowdown.
Looking at a long term chart of oil, you can see that the decline has found some support on the multiyear lower trend line. This is a good sign, at least temporary, that perhaps the demand for oil has stabilized, and that could possibly indicates that the economy could also stabilize.
The chart of the dollar looks like a massive head and shoulders pattern to me, which is a bearish sign. The current rally is a test of the right shoulder. With oil being a commodity, it would benefit if the the dollar does fall, and that could be what is setting up.
Charts provided courtesy of www.decisionpoint.com, analysis by TSP Talk
With the Fed giving money away so freely lately, the value of the dollar is in jeopardy, and it may cause massive inflation down the road. The way things are heading, I can see a trend of higher oil prices and a lower dollar for many years to come. This would not be a terrible thing for stocks, however.
Today we get the initial jobless claims and the retail sales reports. These both have the ability to be market movers. Which way will it go? The way the charts are setting up, I would have to lean toward a negative reaction. With two up days already on the scoreboard, this rally may need some help to keep it going.
That's all for today. Thanks for reading. See you back here tomorrow!
