Stocks acted very well despite the Dow the closing in negative territory. The S&P closed up modestly, while the small caps and international stocks closed up over 1%.
The S&P 500 is coiling up for something. It is riding a rising wedge, which can be bearish, and the index remains below the 50-day moving average (exponential). It did manage to stick its head above that declining trend line, which hasn't been much of a factor as the S&P 500 continues to move above and below it fairly freely.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The MACD indicator (lower graph on chart above) continues to lag during the recent rally. This divergence is a concern as it could be a sign of a weakening internals.
The SentimenTrader.com Smart Money / Dumb Money Confidence shows us the the "dumb money" reading is up to 67, which has been an area that has given the market some trouble. The steep climb from below 20 to 67 is similar to the move it made in early 2008 as investors embraced the bear market rally last spring, but were smacked down during the summer trading.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
Does it mean the market will tank? Maybe, maybe not. But I would at least expect a slow down in the rally. We could simply consolidate, but you have to aware of the potential fragile state of the sentiment indicators. If you made some fair gains over the holidays, it may be time to take profits.
This morning we got the December jobs report and the 524,000 jobs lost was in line with estimates. The market may have already priced in that bad report but the November revision from -533,000 to -584,000 was somewhat of a negative surprise.
That's all for today. Thanks for reading and have a great weekend!
The S&P 500 is coiling up for something. It is riding a rising wedge, which can be bearish, and the index remains below the 50-day moving average (exponential). It did manage to stick its head above that declining trend line, which hasn't been much of a factor as the S&P 500 continues to move above and below it fairly freely.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The MACD indicator (lower graph on chart above) continues to lag during the recent rally. This divergence is a concern as it could be a sign of a weakening internals.
The SentimenTrader.com Smart Money / Dumb Money Confidence shows us the the "dumb money" reading is up to 67, which has been an area that has given the market some trouble. The steep climb from below 20 to 67 is similar to the move it made in early 2008 as investors embraced the bear market rally last spring, but were smacked down during the summer trading.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
Does it mean the market will tank? Maybe, maybe not. But I would at least expect a slow down in the rally. We could simply consolidate, but you have to aware of the potential fragile state of the sentiment indicators. If you made some fair gains over the holidays, it may be time to take profits.
This morning we got the December jobs report and the 524,000 jobs lost was in line with estimates. The market may have already priced in that bad report but the November revision from -533,000 to -584,000 was somewhat of a negative surprise.
That's all for today. Thanks for reading and have a great weekend!
