08/20/13
Stocks opened lower on Monday but like Pavlovian dogs who have made a lot of money in 2013 buying all the dips, buyers came out quickly to buy this recent pullback. The trouble is, they couldn't sustain their usual buying pressure and for the first time in a while, an oversold market did not rebound. The Dow lost 71-points on the day.
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[TD="align: center"] Daily TSP Funds Return[TABLE="width: 158"]
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[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0176%[/TD]
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[TD="align: right"] F-fund:[/TD]
[TD="align: right"] -0.28%[/TD]
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[TD="align: right"] C-fund:[/TD]
[TD="align: right"] -0.58%[/TD]
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[TD="align: right"] S-fund:[/TD]
[TD="align: right"] -0.89%[/TD]
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[TD="align: right"] I-fund:[/TD]
[TD="align: right"] -0.28%[/TD]
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The S&P 500 (SPY) closed for a second straight day below the 50-day EMA, and the early rebound on Monday morning hit that EMA and quickly retreated. The indices are getting quite oversold now and a little short-term relief rally is due, but that open gap near 163 on the SPY is still a prime downside target.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The market leading Dow Transportation Index has now closed below the 50-day EMA for 3 straight days. While it also due for a relief rally, there is a new descending trading channel that will have to be broken before I'd be comfortable buying.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq made an attempt to fill the overhead open gap in early trading as Apple's stock continued to push higher. It was in positive territory for most of the day but it eventually succumbed to the downward pressure of the other indices and ended the day with a negative reversal day.
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[TD="align: left"] We interrupt today's commentary with an important announcement:
After nearly 10 years of writing a daily market commentary here at TSP Talk, I am going to begin my own Premium Service that I will call "TSP Talk Plus". I will continue to provide a free basic daily market commentary right here, but TSP Talk Plus will provide a little extra.
With Scribbler and more recently Ebbchart, moving onto other endeavors in the last year, and the sudden health issues that caused Trader Fred to hastily retire this past spring, I thought it would be a good time to introduce this service which I have been considering for some time.
I am very close to having the service I want but I'm still working on some minor details. I will explain it all very soon, but here are a couple of quick "wills and won'ts".
- The service WILL NOT give my personal allocation signals like our current premium services.
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Sign into the Premium Services area for a Sneak Peek into what you might expect. If you don't have a current login, it's free to get started. If you don't have a login to the premium area yet, here is how to create one: Create Account. If you need help, please read FAQ #1... How do I sign up? or watch this quick instructional video. If you have an account, just login - www.tsptalk.com/members.
More info to follow:[/TD]
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[TR]
[TD="align: left"] We interrupt today's commentary with an important announcement:
After nearly 10 years of writing a daily market commentary here at TSP Talk, I am going to begin my own Premium Service that I will call "TSP Talk Plus". I will continue to provide a free basic daily market commentary right here, but TSP Talk Plus will provide a little extra.
With Scribbler and more recently Ebbchart, moving onto other endeavors in the last year, and the sudden health issues that caused Trader Fred to hastily retire this past spring, I thought it would be a good time to introduce this service which I have been considering for some time.
I am very close to having the service I want but I'm still working on some minor details. I will explain it all very soon, but here are a couple of quick "wills and won'ts".
- The service WILL NOT give my personal allocation signals like our current premium services.
- The service WILL include the TSP Talk Sentiment Survey data with the buy and sell signals. The bull / bear survey results will still be posted publically, but the System signals will only be posted in this new premium service with added commentary about the results.
- Forum members will be given additional privileges which will be posted once finalized.
- AutoTracker members will also see some "extras", which will be announced soon.
- The price will be very reasonable with an additional discount to subscribers of our other premium services.
Sign into the Premium Services area for a Sneak Peek into what you might expect. If you don't have a current login, it's free to get started. If you don't have a login to the premium area yet, here is how to create one: Create Account. If you need help, please read FAQ #1... How do I sign up? or watch this quick instructional video. If you have an account, just login - www.tsptalk.com/members.
More info to follow:[/TD]
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The following type of analysis may not be in the free basic daily market commentary, but will be in TSP Talk Plus starting next week. You might want to check it out and make sure you can login now so you don't have any problems trying to get access next week (http:TSP Talk Members' Home Page). See instructions above.
Continued...
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The small caps of the Russell 2000 fell through the 50-day EMA yesterday like a warm knife through butter yesterday. In June we saw about 4 or 5 closes below that 50-day EMA before that scare was over. It's oversold like everything else, but let's start counting the closes below that EMA. That's 1.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
It was an interesting day for the put/call ratios. We know the dumb money has been bullish here, and not surprisingly, the recent pullback saw them start to roll over off their extreme bullish reading.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The interesting part is that the smart money, while already bearish, did get slightly more bullish during last week's pullback. But yesterday that 10-day moving average rolled over just like the dumb money did, and the daily smart money put/call reading shot past the 3 to 1 ratio.
The stock market has been down, the bond market has been down, gold moved down yesterday, oil was down. You'd think that would mean the dollar has been strong. Not so. The dollar appears to be close to breaking down after free-falling from the early July high. Something's amiss.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Yes, a relief rally is due. The bulls are expecting it, and even the bears figure it's going to happen. Makes me a little concerned. An oversold market that does not rebound can accelerate to the downside while everyone is watching in disbelief. Be careful out there.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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