08/03/11
After seeing the House and Senate pass the debt ceiling bill, the market surprised us with a relentless sell-off. The Dow lost 266-points and while the situation may be different, the action is very reminiscent of 2008.
For the TSP, the C-fund fell 2.56% yesterday, the S-fund dropped 3.16%, the I-fund lost 2.82%, and the F-fund (bonds) gained 0.47%.
The S&P 500 is breaking down before our eyes. The large head and shoulders pattern, which was quietly forming while I was looking at bullish inverted head and shoulders patterns, has broken through the neckline and should this play out like a typical H&S, the downside target is in the neighborhood of 1150. The 20-day EMA also moved below the 50-day EMA.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The S&P has been down 7-day in a row, and the Dow has been in the red for 8-straight days. The last time the S&P was down 8-straight days was in 2008, and the current action is getting noticeably similar to 2008's.
When the all important TARP bill first failed in the House in late September of 2008, a bill we were being told by some that had to pass or the American financial system could fail, the market sold off. Within a few days congress passed the bill... and the market sold off. Sound familiar?
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
At that exact time in 2008, a large head and shoulders pattern broke below the neckline and things got worse in a hurry.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The indices are very oversold and some kind of relief rally is overdue, but I am seeing a lot of TSP'ers jumping into stocks to take advantage. To me that sounds like complacency. Either that or we have become the smart money. If it turns out that we are not the smart money, I think we may need to be suspicious and probably sell any rally UNLESS the S&P 500 can retake the neckline and the 200-day EMA on any bounce.
I am on a semi-vacation the rest of this week but will stop in occasionally to respond to email and also try to write a brief commentary each night. The premium services will be updated as usual.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
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 seeing the House and Senate pass the debt ceiling bill, the market surprised us with a relentless sell-off. The Dow lost 266-points and while the situation may be different, the action is very reminiscent of 2008.
For the TSP, the C-fund fell 2.56% yesterday, the S-fund dropped 3.16%, the I-fund lost 2.82%, and the F-fund (bonds) gained 0.47%.
The S&P 500 is breaking down before our eyes. The large head and shoulders pattern, which was quietly forming while I was looking at bullish inverted head and shoulders patterns, has broken through the neckline and should this play out like a typical H&S, the downside target is in the neighborhood of 1150. The 20-day EMA also moved below the 50-day EMA.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The S&P has been down 7-day in a row, and the Dow has been in the red for 8-straight days. The last time the S&P was down 8-straight days was in 2008, and the current action is getting noticeably similar to 2008's.
When the all important TARP bill first failed in the House in late September of 2008, a bill we were being told by some that had to pass or the American financial system could fail, the market sold off. Within a few days congress passed the bill... and the market sold off. Sound familiar?
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
At that exact time in 2008, a large head and shoulders pattern broke below the neckline and things got worse in a hurry.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The indices are very oversold and some kind of relief rally is overdue, but I am seeing a lot of TSP'ers jumping into stocks to take advantage. To me that sounds like complacency. Either that or we have become the smart money. If it turns out that we are not the smart money, I think we may need to be suspicious and probably sell any rally UNLESS the S&P 500 can retake the neckline and the 200-day EMA on any bounce.
I am on a semi-vacation the rest of this week but will stop in occasionally to respond to email and also try to write a brief commentary each night. The premium services will be updated as usual.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
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.
