Stocks rallied yet again on Friday as the Dow picked up another 58-points; capping a strong week where we saw gains of 1% to 2% in the TSP stock funds. Bonds were also up slightly on Friday and they also had a solid week.
[TABLE="width: 80%, align: center"]
[TR]
[TD="width: 300"]
[/TD]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 163"]
[TR]
[TD="width: 83, align: right"] G-Fund:[/TD]
[TD="width: 80, align: right"] +0.0056%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] F-fund:[/TD]
[TD="width: 80, align: right"] +0.04%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] C-fund:[/TD]
[TD="width: 80, align: right"] +0.42%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] S-fund:[/TD]
[TD="width: 80, align: right"] +0.44%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] I-fund:[/TD]
[TD="width: 80, align: right"] +0.66%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 69%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The strength in the market last week was in large part due to the friendly commentary coming out of the Janet Yellen confirmation hearings as she is making it clear, if she becomes the next Chairman (Chairperson?) of the Federal Reserve, she will continue to flood the system with money until the economy and the jobs market are flourishing.
The S&P 500 is in new high territory and the index broke above a rising wedge formation on Friday. Sometimes the initial breakout from a wedge is a fake-out so we'll be on the lookout for that, but every breakout this year has led to eventual new highs so I doubt that the bulls are worried. The problem is, few and fewer people seem to be worried, and that is... worrisome.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The longer-term chart of the S&P 500 shows that the index remains in a strong rising wedge, but it is nearing the top of the trading channel and could be due for a breather. The daily PMO indicator, which came within a whisper of a sell signal earlier this month, is pointing up again.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Taking a look at a longer-term chart, we see that there could actually be a case made that the S&P 500 is below its normal long-term ascending angle. Going back to 1980, if the angle of incline remained constant, the S&P 500 could be much higher right now, and the recent breakout from a 16-year sideways consolidation could be the launching pad for it to get back in line with that angle of incline.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The small caps have not made a new high this month like most indices, but the pattern looks the same as every other pre-breakout formation we've seen this year.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar has pulled back and the UUP continues to flirt with the 50-day EMA for support after creating a bull flag. This looks like a bullish formation for the dollar, which would be bearish for bonds.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
You can see below that the recent short-term pullback in the dollar helped the bond funds bounce and fill their open gaps. That bounce is going to tested right away this week since those open gaps, once filled, can act as resistance.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
With earnings season basically over, the market is going to look for other catalysts to give it direction. Sentiment is bullish enough to be a concern but the holidays are closing in and that tends to be a good time of the year for stocks. There was a sharp decline last year around this time, but it has been nearly straight up since.
In today's TSP Talk Plus report we look at the put / call ratios, some longer-term index and dollar charts, plus go over the Sentiment Survey results. For more information on how to gain access and a list of the benefitsof being a subscriber, please go to: www.tsptalk.com/plus.php
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.
[TABLE="width: 80%, align: center"]
[TR]
[TD="width: 300"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 163"]
[TR]
[TD="width: 83, align: right"] G-Fund:[/TD]
[TD="width: 80, align: right"] +0.0056%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] F-fund:[/TD]
[TD="width: 80, align: right"] +0.04%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] C-fund:[/TD]
[TD="width: 80, align: right"] +0.42%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] S-fund:[/TD]
[TD="width: 80, align: right"] +0.44%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] I-fund:[/TD]
[TD="width: 80, align: right"] +0.66%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 69%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The strength in the market last week was in large part due to the friendly commentary coming out of the Janet Yellen confirmation hearings as she is making it clear, if she becomes the next Chairman (Chairperson?) of the Federal Reserve, she will continue to flood the system with money until the economy and the jobs market are flourishing.
The S&P 500 is in new high territory and the index broke above a rising wedge formation on Friday. Sometimes the initial breakout from a wedge is a fake-out so we'll be on the lookout for that, but every breakout this year has led to eventual new highs so I doubt that the bulls are worried. The problem is, few and fewer people seem to be worried, and that is... worrisome.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The longer-term chart of the S&P 500 shows that the index remains in a strong rising wedge, but it is nearing the top of the trading channel and could be due for a breather. The daily PMO indicator, which came within a whisper of a sell signal earlier this month, is pointing up again.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Taking a look at a longer-term chart, we see that there could actually be a case made that the S&P 500 is below its normal long-term ascending angle. Going back to 1980, if the angle of incline remained constant, the S&P 500 could be much higher right now, and the recent breakout from a 16-year sideways consolidation could be the launching pad for it to get back in line with that angle of incline.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The small caps have not made a new high this month like most indices, but the pattern looks the same as every other pre-breakout formation we've seen this year.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar has pulled back and the UUP continues to flirt with the 50-day EMA for support after creating a bull flag. This looks like a bullish formation for the dollar, which would be bearish for bonds.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
You can see below that the recent short-term pullback in the dollar helped the bond funds bounce and fill their open gaps. That bounce is going to tested right away this week since those open gaps, once filled, can act as resistance.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
With earnings season basically over, the market is going to look for other catalysts to give it direction. Sentiment is bullish enough to be a concern but the holidays are closing in and that tends to be a good time of the year for stocks. There was a sharp decline last year around this time, but it has been nearly straight up since.
In today's TSP Talk Plus report we look at the put / call ratios, some longer-term index and dollar charts, plus go over the Sentiment Survey results. For more information on how to gain access and a list of the benefitsof being a subscriber, please go to: www.tsptalk.com/plus.php
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.
