03/18/13
Stocks slipped on Friday, ending the long winning streaks we had seen in most of the major indices. The Dow lost 25-points, which is nothing compared to the recent gains, and amazingly, it was the first negative Friday in 2013.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 153"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0043%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]+0.12%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]-0.16%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]-0.17%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]+0.84%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 saw minor losses on Friday and we now head into a post-options expiration week, which is historically less positive that a pre-options week, or even a random week.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Repeating what I said in the recent Weekly Wrap-Up... I have written about options weeks before but only in a broad way. If you know who Trader Fred is, you know he jumps all over claims like this and dives into the data. If you are interested, Fred has done some extensive research on the pre / post options week phenomenon and the reports can be found on this page: Free Trader Fred Technical Reports. Bottom line, the positive bias during pre-options expiration week, and the weak bias during post-option expiration week, does have validity.
The March seasonality chart shows how historically things cool off near the middle of the month, coinciding with the expiration of options on the third Friday of the month.
Chart provided courtesy of www.sentimentrader.com
Now for something completely different... I was going through some charts looking for something that might be of interest to us, and I stumbled on the Semiconductor Index chart. The index is still in a strong uptrend but it was down 1.7% last Friday, and being a leader in the technology sector, it caught my eye.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
I looked at the daily chart which, like most charts, looked quite bullish, but the weekly chart had bearish head and shoulders patterns all over it going back to late 2009.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
We've talked about this head and shoulders pattern many times, where we see a test of the head after the neckline holds, but if the test of the head fails we tend to see a breakdown from the whole pattern.
So this leading index (by leader I mean it is a leader of the Nasdaq and the Nasdaq is one of the market leaders) may be showing some signs of longer-term trouble and this test of the head may be a very interesting juncture for the bull market.
We are starting to see more evidence of overly bullish sentiment from the dumb money, and overly bearish sentiment from the smart money, which is not usually a good sign.
Chart provided courtesy of www.sentimentrader.com
The above is a compilation indicator from SentimenTrader.com that looks at a series of sentiment indicators from across the spectrum, and the recent readings of the dumb money being above 60 while the smart money is below 40 triggers some concern.
The futures are lower as I write this as there is trouble in Cyprus. There is some concern over a possible run on the banks there after a serious proposal of taxing bank account deposits as much as 12.5%, depending on the size of the deposits. I don't think that would go over well here, but the possibility of contagion has other financially troubled European Union countries uneasy.
Why is this of any interest to us? Short-term, the market has gone too far too fast and this may be the excuse to finally see some profit taking.
Administrative note: We are starting our annual March Madness contest. For more info, see THIS POST in the forum.
Thanks for reading! We'll see you 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.
Stocks slipped on Friday, ending the long winning streaks we had seen in most of the major indices. The Dow lost 25-points, which is nothing compared to the recent gains, and amazingly, it was the first negative Friday in 2013.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 153"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0043%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]+0.12%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]-0.16%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]-0.17%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]+0.84%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 saw minor losses on Friday and we now head into a post-options expiration week, which is historically less positive that a pre-options week, or even a random week.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Repeating what I said in the recent Weekly Wrap-Up... I have written about options weeks before but only in a broad way. If you know who Trader Fred is, you know he jumps all over claims like this and dives into the data. If you are interested, Fred has done some extensive research on the pre / post options week phenomenon and the reports can be found on this page: Free Trader Fred Technical Reports. Bottom line, the positive bias during pre-options expiration week, and the weak bias during post-option expiration week, does have validity.
The March seasonality chart shows how historically things cool off near the middle of the month, coinciding with the expiration of options on the third Friday of the month.
Chart provided courtesy of www.sentimentrader.com
Now for something completely different... I was going through some charts looking for something that might be of interest to us, and I stumbled on the Semiconductor Index chart. The index is still in a strong uptrend but it was down 1.7% last Friday, and being a leader in the technology sector, it caught my eye.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
I looked at the daily chart which, like most charts, looked quite bullish, but the weekly chart had bearish head and shoulders patterns all over it going back to late 2009.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
We've talked about this head and shoulders pattern many times, where we see a test of the head after the neckline holds, but if the test of the head fails we tend to see a breakdown from the whole pattern.
So this leading index (by leader I mean it is a leader of the Nasdaq and the Nasdaq is one of the market leaders) may be showing some signs of longer-term trouble and this test of the head may be a very interesting juncture for the bull market.
We are starting to see more evidence of overly bullish sentiment from the dumb money, and overly bearish sentiment from the smart money, which is not usually a good sign.
Chart provided courtesy of www.sentimentrader.com
The above is a compilation indicator from SentimenTrader.com that looks at a series of sentiment indicators from across the spectrum, and the recent readings of the dumb money being above 60 while the smart money is below 40 triggers some concern.
The futures are lower as I write this as there is trouble in Cyprus. There is some concern over a possible run on the banks there after a serious proposal of taxing bank account deposits as much as 12.5%, depending on the size of the deposits. I don't think that would go over well here, but the possibility of contagion has other financially troubled European Union countries uneasy.
Why is this of any interest to us? Short-term, the market has gone too far too fast and this may be the excuse to finally see some profit taking.
Administrative note: We are starting our annual March Madness contest. For more info, see THIS POST in the forum.
Thanks for reading! We'll see you 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.
