9/21/12
The stock indices have been very mixed lately as they tread on either side of the break-even mark each day. The Dow ended the day up 19-points, while the S&P and Nasdaq were slightly lower, small caps were down a little more, and the Dow Transports were pummeled.
[TABLE="width: 88%, align: center"]
[TR]
[TD="width: 241"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 151"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] 0.0036%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] 0.05%[/TD]
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[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] -0.04%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] -0.61%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] -1.10%[/TD]
[/TR]
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[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
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[/TD]
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So that's 4 days of consolidation for the S&P 500 after hitting a new high last Friday. We saw somewhat of a negative reversal on that Friday and yesterday's action may be considered a positive reversal. It may have found support at the old rising resistance line so this would be a technically convenient place for the rally to continue if that's what it is going to do.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The 4 day flag-like formation has also taken most of the indicators off of their highly overbought levels and brought them closer to neutral.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transportation Index was hit hard yesterday and just 4 days after testing the top of the trading range, it is now testing the bottom. Since this is a leading index, whether it holds from here and heads back toward the top of the range, or breaks down, could be an indication of where the follower indices will be in a few days or weeks.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The next two weeks will be uneventful compared to what happens in October. In October we of course get the jobs report on October 5, but earnings season will begin shortly after that. If expectations are high we could see a "buy the rumor, sell the news" into the reports, but as we've talked about, the second half of September is very weak historically. The election rhetoric and the chaos in the Middle East will have their effects as well.
Thanks for reading! Have a great weekend!
Tom Crowley
Posted daily at TSP Talk Market Commentary
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