3/04/13
After opening the down over 100-points on Friday, stocks reversed direction and closed in positive territory (Dow +35) and created a positive reversal day after Thursday's negative reversal day. That is a short-term bullish formation, but the increased volatility near the overhead resistance should be a warning sign.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 154"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0043%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]+0.08%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]+0.23%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]+0.06%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]-0.79%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
You have to be impressed with how resilient the market indices have been considering the increase in volatility near the overhead resistance. I am in defensive mode because the charts don't look all that great and we are so close to the resistance, and I would actually be completely bearish right now except for the fact that investor sentiment in surveys and put/call ratios tells us that there may be too much bearishness out there. This is probably what is keeping the indices buoyant.
Except for what I call the "fake out day" a couple of weeks ago, the S&P 500 has still not been able to get, and stay, above the 1525 area.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The charts would tell us that the path of least resistance is on the downside and a pullback seems like a reasonable expectation, but so far the S&P and other indices have been hanging around the resistance area. Again, this is likely because investors seem to be expecting a pullback, and the market doesn't like to do what most people expect.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
A couple of the leaders, the Nasdaq...
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
.. and the Russell 2000 (small caps) may be forming bear flags, and that is something to keep an eye on.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
While the Dow Transportation Index is showing more strength and very close to a breakout. Despite the strength, until it breaks out, it is at risk of pulling back from a double top.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The volatility has spooked investors so despite the indices being near multi year, and some cases all-time highs, we're seeing sentiment readings below 30% bullish, and bull to bear ratios under 1 to 1.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Our survey shows similar numbers so this may be why stocks are remaining stubbornly near the highs.
Whenever the indicators are in conflict with the charts, I tend to lean toward believing the charts, and since they are giving us more reason to be concerned, I will stay defensive.
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.
After opening the down over 100-points on Friday, stocks reversed direction and closed in positive territory (Dow +35) and created a positive reversal day after Thursday's negative reversal day. That is a short-term bullish formation, but the increased volatility near the overhead resistance should be a warning sign.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 154"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0043%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]+0.08%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]+0.23%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]+0.06%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]-0.79%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
You have to be impressed with how resilient the market indices have been considering the increase in volatility near the overhead resistance. I am in defensive mode because the charts don't look all that great and we are so close to the resistance, and I would actually be completely bearish right now except for the fact that investor sentiment in surveys and put/call ratios tells us that there may be too much bearishness out there. This is probably what is keeping the indices buoyant.
Except for what I call the "fake out day" a couple of weeks ago, the S&P 500 has still not been able to get, and stay, above the 1525 area.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The charts would tell us that the path of least resistance is on the downside and a pullback seems like a reasonable expectation, but so far the S&P and other indices have been hanging around the resistance area. Again, this is likely because investors seem to be expecting a pullback, and the market doesn't like to do what most people expect.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
A couple of the leaders, the Nasdaq...
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
.. and the Russell 2000 (small caps) may be forming bear flags, and that is something to keep an eye on.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
While the Dow Transportation Index is showing more strength and very close to a breakout. Despite the strength, until it breaks out, it is at risk of pulling back from a double top.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The volatility has spooked investors so despite the indices being near multi year, and some cases all-time highs, we're seeing sentiment readings below 30% bullish, and bull to bear ratios under 1 to 1.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Our survey shows similar numbers so this may be why stocks are remaining stubbornly near the highs.
Whenever the indicators are in conflict with the charts, I tend to lean toward believing the charts, and since they are giving us more reason to be concerned, I will stay defensive.
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.
