8/22/12
Stocks rallied out of the gate yesterday but went into a decline by late afternoon as the buying dried up. The Dow, which had been up about 60-points earlier, closed down 68-points.
[TABLE="align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"] Daily TSP Funds Return
[TABLE="width: 157"]
[TR]
[TD="align: right"] G-Fund:
[/TD]
[TD="align: right"] 0.0029%
[/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"] -0.35%
[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:
[/TD]
[TD="align: right"] -0.02%
[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:
[/TD]
[TD="align: right"] 1.09%
[/TD]
[/TR]
[/TABLE]
[TABLE="align: center"]
[TR]
[TD="align: right"]
[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P made an attempt to breakout above the rising wedge again, but closed back in it, possibly setting up a negative reversal day.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
We talked about the double top in the small caps of the Russell 2000 the other day. Double tops tend to see pullbacks before breakouts, and yesterday's early action probably fooled many investors into buying a breakout, only to see the index pullback, create a negative reversal day, and possibly delay any pullback for at least the short-term. Of course the market loves to keep us on our toes so who knows if the classic patterns will do what we might expect?
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
One of the market leaders, the large cap tech stocks of the Nasdaq 100 Index may have also created a double top. It put in not only a negative reversal day - but a negative outside day where the high was higher than the prior day's high, and the low was low than the prior day's low.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Double tops are in general bearish and we could expect at least a short-term pause. But as I said above, sometimes we need to expect the unexpected.
The dollar did the opposite. While the dollar ETF, UUP broke down, which would normally be bullish for stocks, and it was in early trading, the late reversal may be setting up a fake out here as well.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Ideally for the stock market bulls, the dollar could reverse up, find resistance at the old support line, and the rally in stocks would continue at that point.
Look for some short-term weakness in stocks as the fake outs, double tops, and reversals play out. If the breakouts turn out to be real, and resume to the upside, this could be an explosive leg higher. I am not doing too much anticipating. Instead, I will react to what happens. As of right now my read is that we saw a failed breakout and that is negative. If we resume higher I am willing to get very bullish.
I am wrapping up my vacation and will be back on my regular schedule on Thursday. Thanks for your patience over the last week with late AutoTracker updates and some delays in responding to emails, etc.
Thanks for reading! We'll see you back here tomorrow.
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 rallied out of the gate yesterday but went into a decline by late afternoon as the buying dried up. The Dow, which had been up about 60-points earlier, closed down 68-points.
[TABLE="align: center"]
[TR]
[TD]
[TD="align: center"] Daily TSP Funds Return
[TABLE="width: 157"]
[TR]
[TD="align: right"] G-Fund:
[/TD]
[TD="align: right"] 0.0029%
[/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"] -0.35%
[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:
[/TD]
[TD="align: right"] -0.02%
[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:
[/TD]
[TD="align: right"] 1.09%
[/TD]
[/TR]
[/TABLE]
[TABLE="align: center"]
[TR]
[TD="align: right"]
[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P made an attempt to breakout above the rising wedge again, but closed back in it, possibly setting up a negative reversal day.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
We talked about the double top in the small caps of the Russell 2000 the other day. Double tops tend to see pullbacks before breakouts, and yesterday's early action probably fooled many investors into buying a breakout, only to see the index pullback, create a negative reversal day, and possibly delay any pullback for at least the short-term. Of course the market loves to keep us on our toes so who knows if the classic patterns will do what we might expect?
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
One of the market leaders, the large cap tech stocks of the Nasdaq 100 Index may have also created a double top. It put in not only a negative reversal day - but a negative outside day where the high was higher than the prior day's high, and the low was low than the prior day's low.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Double tops are in general bearish and we could expect at least a short-term pause. But as I said above, sometimes we need to expect the unexpected.
The dollar did the opposite. While the dollar ETF, UUP broke down, which would normally be bullish for stocks, and it was in early trading, the late reversal may be setting up a fake out here as well.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Ideally for the stock market bulls, the dollar could reverse up, find resistance at the old support line, and the rally in stocks would continue at that point.
Look for some short-term weakness in stocks as the fake outs, double tops, and reversals play out. If the breakouts turn out to be real, and resume to the upside, this could be an explosive leg higher. I am not doing too much anticipating. Instead, I will react to what happens. As of right now my read is that we saw a failed breakout and that is negative. If we resume higher I am willing to get very bullish.
I am wrapping up my vacation and will be back on my regular schedule on Thursday. Thanks for your patience over the last week with late AutoTracker updates and some delays in responding to emails, etc.
Thanks for reading! We'll see you back here tomorrow.
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.
