1/28/13
The market continued its bullish ways as the Dow's 71-point gain on Friday was the 11th positive day in the last 12, while the S&P 500 has had 8 consecutive positive closes.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 151"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]0.0043%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]-0.38%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]0.54%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]0.80%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]0.92%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 is riding along the upper resistance which is the top of the short-term trading channel (blue). Currently trading at 1503, there is also some longer-term resistance near 1520. The trend is up, up, up, but no matter how you look at this, there is more room on the downside when that pullback comes. But rallies can last longer than seems reasonable so reacting to weakness, rather than trying to anticipate it, will keep you in longer if the rally has more legs.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dumb money put / call ratio is surprisingly not yet at the more recent extended levels (above the 0.60 mark on the chart below) and you can see that 2012 started with a similar rally that produced few pullbacks until April despite the overly bullish readings.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
I'm not sure if this indicator will hit that red line before we get a pullback, but if it does, that could be a place to lighten up - at least some.
This Rydex Cash Flow Ratio, also considered a dumb money indicator, is also not near the extreme readings we saw last year. At first glance I thought that meant we had a lot more ammunition (money on the sidelines that can be used to buy) but in 2011 there was a similar formation where a divergence between the dumb money being less bullish, and the charts nearing , or at new highs, preempted a steep market drop. Something for us to keep watching.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The oscillating overbought / oversold type indicators are very extended but in a strong bull market, these types indicators can get "pinned" toward the top like they at the start of 2012 (red rectangle)...
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The yield on the 10-year Treasury Note broke out from its bull flag formation after finding support at the rising support line.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
There is now another gap there that can be filled, but if / when that gap gets filled, for the most part that will be bullish for yields, and bearish on bond prices and the F-fund.
The problem with a stock market like this, where support is further and further below the current levels, a sudden bout of bad news could trigger a sharp, quick sell-off. It happens, but we don't want to spend too much time 'expecting' bad news. I'm hoping the charts give us some clues before something like that happens.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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.
The market continued its bullish ways as the Dow's 71-point gain on Friday was the 11th positive day in the last 12, while the S&P 500 has had 8 consecutive positive closes.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 151"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]0.0043%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]-0.38%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]0.54%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]0.80%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]0.92%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 is riding along the upper resistance which is the top of the short-term trading channel (blue). Currently trading at 1503, there is also some longer-term resistance near 1520. The trend is up, up, up, but no matter how you look at this, there is more room on the downside when that pullback comes. But rallies can last longer than seems reasonable so reacting to weakness, rather than trying to anticipate it, will keep you in longer if the rally has more legs.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dumb money put / call ratio is surprisingly not yet at the more recent extended levels (above the 0.60 mark on the chart below) and you can see that 2012 started with a similar rally that produced few pullbacks until April despite the overly bullish readings.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
I'm not sure if this indicator will hit that red line before we get a pullback, but if it does, that could be a place to lighten up - at least some.
This Rydex Cash Flow Ratio, also considered a dumb money indicator, is also not near the extreme readings we saw last year. At first glance I thought that meant we had a lot more ammunition (money on the sidelines that can be used to buy) but in 2011 there was a similar formation where a divergence between the dumb money being less bullish, and the charts nearing , or at new highs, preempted a steep market drop. Something for us to keep watching.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The oscillating overbought / oversold type indicators are very extended but in a strong bull market, these types indicators can get "pinned" toward the top like they at the start of 2012 (red rectangle)...
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The yield on the 10-year Treasury Note broke out from its bull flag formation after finding support at the rising support line.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
There is now another gap there that can be filled, but if / when that gap gets filled, for the most part that will be bullish for yields, and bearish on bond prices and the F-fund.
The problem with a stock market like this, where support is further and further below the current levels, a sudden bout of bad news could trigger a sharp, quick sell-off. It happens, but we don't want to spend too much time 'expecting' bad news. I'm hoping the charts give us some clues before something like that happens.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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.
