10/02/12
Once again, it is hard to trust a Monday morning gap opening. While we saw a respectable 78-point gain in the Dow at the close, we saw a triple digit gain during early trading, and many of the major indices gave back most, if not all, of their early gains.
[TABLE="width: 88%, align: center"]
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[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"] 0.0029%[/TD]
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[TD="align: right"] F-fund:[/TD]
[TD="align: right"] 0.08%[/TD]
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[TD="align: right"] C-fund:[/TD]
[TD="align: right"] 0.27%[/TD]
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[TD="align: right"] S-fund:[/TD]
[TD="align: right"] 0.02%[/TD]
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[TD="align: right"] I-fund:[/TD]
[TD="align: right"] 0.94%[/TD]
[/TR]
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[TD="align: right"] [/TD]
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The S&P 500 found some resistance at its peak yesterday and is now in a battle between that resistance and a couple of levels of support. The negative reversal day might suggest more downside today so the rising support could be tested right away. A stronger level of support is down near 1430.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Like the other indices, the leaders - Nasdaq and the Dow Transportation Index - both gave back early gains and saw little movement by the close. Nothing to report.
The dollar remains below the 20-day EMA and in the bear flag. This looks like it wants to break to the downside, which would help out stocks, but any kind of news out of Europe could push this either way. The chart would suggest the downside, as I said, but there are still open gaps above so we'll have to see.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Most of the indicators aren't giving us much to go on. The overbought oversold indicators are basically neutral. The sentiment indicators are slightly over bearish but close the neutral. Seasonality is on the side of the bulls this week, and with the charts hanging onto support I'd have to give the edge to the bulls, but yesterday's reversal day threw a wrench into things.
With the very important jobs report this Friday - the 2nd to last one before the election - I suspect investors will be tentative to make any big bets without some other surprise report, data, or news event. Europe is percolating again so it may come down to that between today and Friday's report.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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