5/16/12Stocks tried to rebound yesterday, but more news out of Greece sent the dollar higher, and stocks lower by the close. The Dow, which had been up 63-points in earlier trading, closed down 63.
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[TD="align: center"] Daily TSP Funds Return
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[TD="align: right"] C-fund:
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[TD] - 0.55%
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[TD="align: right"] S-fund:
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[TD] - 0.39%
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[TD="align: right"] I-fund:
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[TD] - 1.83%
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[TD="align: right"] F-fund:
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[TD] - 0.01%
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[TD="align: right"] G-Fund:
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[TD] +0.004%
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The S&P 500 has broken down from the head and shoulders pattern and the technical picture looks awful, but it has been down 8 of the last 10 days and is due for some kind of relief rally.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar continues to rally on the weakness out of Europe. This is acting like an anchor to the U.S. markets. This chart of the dollar looks very bullish, but it may be due for a pullback after being up 11 days in a row.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The indicators are quite stretch to the oversold side. Markets don't always instantly turnaround when they get this oversold, but you can see that hitting levels this low does tends to precede at least short-term rallies.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Another look at both of the dumb money put / call ratios, the CBOE and Equity ratios, shows just how bearish they have become. That Equity ratio (in blue) is down to 0.83 and that is the 3rd most bearish reading on this 3-year chart.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
This is an awful looking market, but unless Greece falls off of the map in the next few days, we should start to see some money come back in to buy bargains. There is a lot of resistance overhead so I think the rallies will need to be sold, but the more people that are looking for that rally to sell, the harder it may be to get one. The Facebook IPO is Friday. While overhyped already, it may bring a little optimism with it.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
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