3/30/12
Stocks got off to a rough start yesterday, and despite some mixed results, all of the indices reversed nicely closing near the highs of the day. The Dow ended the day up 20-points, while the S&P 500 and Nasdaq saw moderate losses.
For the TSP, the C-fund was down 0.16% yesterday, the S-fund fell 0.11%, the I-fund lost 0.98%, and the F-fund (bonds) gained 0.48%.
The S&P 500 dropped to the 20-day EMA and rebounded nicely, creating a kangaroo tail reversal pattern. We talked about end of the quarter window dressing the other day and money mangers will play games to try to make their quarterly report portfolios more attractive. So whether this action is genuine or the product of these games remains to be seen, but from a purely technical standpoint, yesterday's action looks good for Friday - at least early on.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transportation Index also saw a big reversal day and the low from last week held. The test will be if the recent declining resistance line can be taken out or if the Transports will back down from it.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
On to seasonality: April has been a generally strong month historically, and it's the last of the stronger 6-month period of the year. You've probably heard the saying, sell in May and go away, which worked out well last year. The philosophy is buy and hold stocks from November through April, then sell in May and stay out through October. So, perhaps this bull market has another month left in it.
Chart provided courtesy of www.sentimentrader.com
As far as the Good Friday seasonality goes, historically the stronger days have been the Tuesday and Thursday prior to Good Friday, and the Tuesday after. The Friday before (today) and the Friday after, plus the Monday after, have had some trouble.
Chart provided courtesy of www.sentimentrader.com
Of course Good Friday / Easter are not held on the same weekend each year so I don't know how much this will mean. With today being the last day of the first quarter, and Monday the first trading day in the new month, I think the holiday seasonality is less meaningful.
The yield on the 10-year Treasury note is still trying to fill in the large open left open between March 13 and 14 near 2.12%. It's getting pretty close. The bottom of gaps tend to act as support but there is still another small gap open down near 2.03%.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
With today being the last trading day of the month, we all get our new set of Interfund Transfers (IFT's) beginning Monday.
Thanks for reading! Have a great weekend!
Tom Crowley
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