8/10/12
It was another uneventful day yesterday as the Dow lost 11-points and the S&P 500 gained less than 1 point for a second consecutive day. The Dow ended its winning streak, but the small gain in the S&P made it 5 straight positive closes.
[TABLE="align: center"]
[TR]
[TD]
[TD="align: center"] Daily TSP Funds Return
[TABLE="align: center"]
[TR]
[TD="align: right"] G-Fund:
[/TD]
[TD] +0.003%
[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:
[/TD]
[TD] - 0.01%
[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:
[/TD]
[TD] +0.09%
[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:
[/TD]
[TD] +0.32%
[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:
[/TD]
[TD] +0.14%
[/TD]
[/TR]
[TR]
[TD="colspan: 2, align: right"]
[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 is still sliding up that resistance line as the low volume trading shows there is not much conviction on the bull or bear side right now, but the bulls have an edge as they have been able to hold onto last Friday's big gains. The wedge is getting narrower.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The market leader isn't fairing as well as it never did break above its descending resistance line, and yesterday's losses appear to have triggered a pullback from that resistance. It is also back below all 3 major moving averages.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The put/call ratios show that the dumb money is remaining bullish - not normally the best sign for stocks, while the smart money is getting a little more defensive, although not overly extreme yet. I view this a slightly negative reading for stocks.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Bond yields have caught fire and the yield on the 10-year Treasury Note moved above 1.7% at one point yesterday, taking out the longer-term resistance line, but it faded in the afternoon trading and closed just below the resistance.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Since bonds move inversely to yields, this has put pressure on the F-fund and whether the resistance holds could determine if the F-fund is a good place to be or not. A move above resistance would be bearish for bonds and the F-fund.
The dollar (via the UUP ETF) found resistance at the 20-day EMA yesterday after moving above the 50-day EMA. You can see that the UUP is in a short-term downtrend (red), but the longer-term trend (blue) is moving higher.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
I suspect stocks will move in the opposite direction of the break on the above chart. If resistance on the short-term trading channel (red) is broken to the upside, look for stocks to pullback. If the support of the longer term trend (blue) breaks down, look for more upside in the stock market.
Thanks for reading! Have a great weekend!
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.
