07/09/13
Stocks started the new week with a rally in both stocks and bonds. The Dow was up over 125-points in early trading, and while it closed below the morning highs, it did manage to hold onto a good part of the gains adding 89-points by the close.
[TABLE="width: 88%, align: center"]
[TR]
[TD="width: 305"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 153"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0177%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] +0.43%[/TD]
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[TD="align: right"] C-fund:[/TD]
[TD="align: right"] +0.56%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] +0.30%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] +0.63%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
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I have to admit that I am very surprised by the continued strength. The first week or so in July is historically strong so I guess I shouldn't be overly surprised, but the relentlessness and the ease with which the S&P 500 broke above resistance yesterday has me saying, hmmm. As always, these breakouts need to prove themselves by closing for at least 3 days above the resistance.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The PMO indicator has actually given a buy signal here...
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
... Although some indices have been up for 9 straight days, so things are on the overbought side. We'll have to see if any pullback can hold that old resistance as new support.
Chart provided courtesy of www.sentimentrader.com
The weekly chart shows that the resistance from the top of the long-term rising trading channel did hold on the first back in May. The question is, are we still closer to a top because of that resistance? You can see that in 2011 there was a double test of the top of that channel before we saw any significant correction.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Also, the weekly chart shows a longer-term PMO sell signal (remember the daily signal just gave a buy signal), so any attempts at new highs could be a trap. I believe I said the same thing earlier this year, but this time the long-term resistance is in play.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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