9/27/12
Stocks continued to pull back yesterday, making it 7 of the last 8 days that the S&P 500 closed in negative territory. The Dow lost 44-points on the day.
[TABLE="width: 88%, align: center"]
[TR]
[TD="width: 241"]
[/TD]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 150"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] 0.0036%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] 0.17%[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] -0.56%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] -0.59%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] -1.04%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 is back in the rising trading channel and fell below the 20-day EMA (warning sign). It is now testing another of the rising trend lines (blue) and the next levels of support would be the 50-day EMA, and then the bottom of the trading channel.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The S&P 500 has now been down 7 out of the last 8 trading days after having reached a 52-week high during the past two weeks. According to sentimenTrader.com:
"Of the four other times that's happened in the last 20 years, the index rebounded over the next three days each time (8/13/92, 12/6/96, 2/24/04 and 3/2/07). After the very short-term, performance was mixed. And prior to the last 20 years, performance in all time frames was in line or a bit worse than random, particularly two weeks later when the S&P was positive only 43% of the time."
The Dow Transportation Index, which we watch closely because it is considered the market leader, is still testing the lower end of its trading range, but barely hung on to the support line.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The put / call ratios are starting to make some changes. The smart money of the OEX put/call ratio, have come off of their very bearish reading from early September and as the market has pulled back, they have become more aggressive with their call buying (getting bullish). That's typical action from the smart money - They take profits as the market rises, and do some buying as the market is falling. Buy low, sell high. Sounds like a good plan.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dumb money of the CBOE put/call ratio were the most bullish when the S&P 500 was making new highs recently. Now that stocks are pulling back, the dumb money is starting to buy more put options (getting bearish). That's typical dumb money action - Buy high, sell low.
October gets a pretty bad rap because historically there have been a few severe market crashes. But over the long term, October is not a bad month on average. 5 months have better records. 5 have worse, and it is tied returns-wise with July, although October is positive more often than July.
Chart provided courtesy of www.sentimentrader.com
Historically, the last couple of days in September are weaker than average and early October is stronger than average. But this is an election year and who knows what will happen?
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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.
Stocks continued to pull back yesterday, making it 7 of the last 8 days that the S&P 500 closed in negative territory. The Dow lost 44-points on the day.
[TABLE="width: 88%, align: center"]
[TR]
[TD="width: 241"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 150"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] 0.0036%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] 0.17%[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] -0.56%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] -0.59%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] -1.04%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 is back in the rising trading channel and fell below the 20-day EMA (warning sign). It is now testing another of the rising trend lines (blue) and the next levels of support would be the 50-day EMA, and then the bottom of the trading channel.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The S&P 500 has now been down 7 out of the last 8 trading days after having reached a 52-week high during the past two weeks. According to sentimenTrader.com:
"Of the four other times that's happened in the last 20 years, the index rebounded over the next three days each time (8/13/92, 12/6/96, 2/24/04 and 3/2/07). After the very short-term, performance was mixed. And prior to the last 20 years, performance in all time frames was in line or a bit worse than random, particularly two weeks later when the S&P was positive only 43% of the time."
The Dow Transportation Index, which we watch closely because it is considered the market leader, is still testing the lower end of its trading range, but barely hung on to the support line.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The put / call ratios are starting to make some changes. The smart money of the OEX put/call ratio, have come off of their very bearish reading from early September and as the market has pulled back, they have become more aggressive with their call buying (getting bullish). That's typical action from the smart money - They take profits as the market rises, and do some buying as the market is falling. Buy low, sell high. Sounds like a good plan.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dumb money of the CBOE put/call ratio were the most bullish when the S&P 500 was making new highs recently. Now that stocks are pulling back, the dumb money is starting to buy more put options (getting bearish). That's typical dumb money action - Buy high, sell low.
October gets a pretty bad rap because historically there have been a few severe market crashes. But over the long term, October is not a bad month on average. 5 months have better records. 5 have worse, and it is tied returns-wise with July, although October is positive more often than July.
Chart provided courtesy of www.sentimentrader.com
Historically, the last couple of days in September are weaker than average and early October is stronger than average. But this is an election year and who knows what will happen?
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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.
