12/07/12
Stocks continue to bounce around looking for direction. The Dow gained 40-points and closed near its high, but it was not an easy road yesterday.
[TABLE="width: 88%, align: center"]
[TR]
[TD="width: 241"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 155"]
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[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] 0.0036%[/TD]
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[TD="align: right"] F-fund:[/TD]
[TD="align: right"] -0.10%[/TD]
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[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] 0.36%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] 0.28%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] 0.22%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
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[/TD]
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The S&P 500 looks better after Thursday's modest rally. It closed above the 50-day EMA and the right side of that inverted head and shoulders pattern is filling out nicely.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As we have talked about many times, inverted head and shoulders patterns tend to reconcile in one of two ways. It either breaks above the neckline, which in this case is near the 1425-1430 area, or it pulls back to test the middle of the head first before resuming higher. That test would probably be near the 200-day EMA.
The 2012 spring pattern seems to be continuing and as I've said before, we shouldn't be looking for day to day copycat action, but rather the general patterns. The chart would indicate a brief move lower, but the bigger picture shows choppy, volatile upward action over the next several weeks.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
If that's what we get, we could be seeing a move higher within the next few days, but that isn't what the seasonality chart would suggest.
The December seasonality chart shows an historical weak stretch from trading day 5 through trading day 12. Today (Friday) is trading day number 5.
Chart provided courtesy of www.sentimentrader.com
The TSP Talk Sentiment Survey came in at 42% bulls, 46% bears, for a bulls to bears ratio of 0.91 to 1. That is a buy signal which means the system will remain in a 100% S fund allocation for next week.
Today we get the November jobs report and as usual, that could be a market mover, but the interesting part of the day will be the close. How will investors handle going into another weekend with potential fiscal cliff actions and the Sunday morning talk show disclosures by both side of the political aisle?
The jobs report estimates are for a gain of 120,000 jobs and an unemployment rate of 8.0%.
Thanks for reading! Have a great weekend!
Tom Crowley
Posted daily at TSP Talk Market Commentary
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