7/16/12
Is the rally ready to resume, or was Friday a one day fluke?
Stocks rallied sharply on Friday, following through on Thursday's reversal bounce off of the support at 200-day exponential moving average. The Dow gained 204-points.
[TABLE="align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"] Daily TSP Funds Return
[TABLE="align: center"]
[TR]
[TD="align: right"] G-Fund:
[/TD]
[TD] +0.004%
[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:
[/TD]
[TD] - 0.03%
[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:
[/TD]
[TD] +1.65%
[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:
[/TD]
[TD] +1.44%
[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:
[/TD]
[TD] +1.80%
[/TD]
[/TR]
[TR]
[TD="colspan: 2, align: right"]
[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The rally took the S&P 500 barely into positive territory for the week, and it is now down just slightly for the month of July. The index is back above the 20 and 50-day EMA's, and if this bounce can continue up and take out the early July high, the S&P will have made a second higher low, and a third higher high. That sounds like an uptrend.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Here's the problem, and I know you must be getting tired of me bringing it up. Mid-July is a tough time for stocks historically. The 9th trading day of the month, which last Friday was, is oddly strong but things become more of a struggle seasonality-wise, over the next week or so. Today is the 10th trading day of the month.
Chart provided courtesy of www.sentimentrader.com
Here's a closer look at the S&P 500. It appears 1390 or higher is possible - if we can get past this historically weak earnings season.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq filled the open gap last Thursday after finding support at the 200-day EMA, and like the S&P, it is now also above the 20 and 50-day EMA's. If there is one negative on the chart it is that volume was very light during Friday's big rally. Investors were more aggressively selling last week during the down days, then they were buying on Friday.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transportation Index, the market leader, also found support near the 200-day EMA and is back above the 20 and 50-day EMA's. The early July high was lower than the June high so for technical analysis purposes, it will important for the Transports to get above that 5250 level, or we could have a series of lower highs started.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
So the battle this week is between some good looking charts that found support in just the right spots and neatly filled open gaps, and the release of earnings reports that have a tendency to see a "sell the news" reaction in July. The wrench in all of this will be the ongoing questionable headlines out of Europe.
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.
Is the rally ready to resume, or was Friday a one day fluke?
Stocks rallied sharply on Friday, following through on Thursday's reversal bounce off of the support at 200-day exponential moving average. The Dow gained 204-points.
[TABLE="align: center"]
[TR]
[TD]
[TD="align: center"] Daily TSP Funds Return
[TABLE="align: center"]
[TR]
[TD="align: right"] G-Fund:
[/TD]
[TD] +0.004%
[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:
[/TD]
[TD] - 0.03%
[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:
[/TD]
[TD] +1.65%
[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:
[/TD]
[TD] +1.44%
[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:
[/TD]
[TD] +1.80%
[/TD]
[/TR]
[TR]
[TD="colspan: 2, align: right"]
[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The rally took the S&P 500 barely into positive territory for the week, and it is now down just slightly for the month of July. The index is back above the 20 and 50-day EMA's, and if this bounce can continue up and take out the early July high, the S&P will have made a second higher low, and a third higher high. That sounds like an uptrend.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Here's the problem, and I know you must be getting tired of me bringing it up. Mid-July is a tough time for stocks historically. The 9th trading day of the month, which last Friday was, is oddly strong but things become more of a struggle seasonality-wise, over the next week or so. Today is the 10th trading day of the month.
Chart provided courtesy of www.sentimentrader.com
Here's a closer look at the S&P 500. It appears 1390 or higher is possible - if we can get past this historically weak earnings season.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq filled the open gap last Thursday after finding support at the 200-day EMA, and like the S&P, it is now also above the 20 and 50-day EMA's. If there is one negative on the chart it is that volume was very light during Friday's big rally. Investors were more aggressively selling last week during the down days, then they were buying on Friday.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transportation Index, the market leader, also found support near the 200-day EMA and is back above the 20 and 50-day EMA's. The early July high was lower than the June high so for technical analysis purposes, it will important for the Transports to get above that 5250 level, or we could have a series of lower highs started.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
So the battle this week is between some good looking charts that found support in just the right spots and neatly filled open gaps, and the release of earnings reports that have a tendency to see a "sell the news" reaction in July. The wrench in all of this will be the ongoing questionable headlines out of Europe.
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.
