8/08/12
Stocks rallied for a third straight day yesterday as the Dow picked up 51-points. But for a second straight day some late selling took away about half its early gains.
[TABLE="align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"] Daily TSP Funds Return
[TABLE="align: center"]
[TR]
[TD="align: right"] G-Fund:
[/TD]
[TD] +0.004%
[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:
[/TD]
[TD] - 0.27%
[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:
[/TD]
[TD] +0.51%
[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:
[/TD]
[TD] +0.90%
[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:
[/TD]
[TD] +0.71%
[/TD]
[/TR]
[TR]
[TD="colspan: 2, align: right"]
[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 is still flirting with the upper end of its rising wedge, and poked through the resistance intra-day before falling back into the wedge late.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The last 4 days have been very similar to a 4 day stretch we saw in late June / early July. We'll have to see if it plays out the same way, which wouldn't be very bullish for stocks since the last time the S&P went down for 6 consecutive days. Of course back then we were heading into a holiday week and there was a jobs report in there, and this week the schedule is much less eventful.
I was looking at the the SPY, the ETF that follows the S&P 500, and on this chart you can see the gaps more clearly because of the way it is traded. Anyway, Friday's big rally produced small gaps on the Nasdaq and the Russell 2000, while the S&P 500 chart above doesn't show one. But on the ETF it does.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
You can see that the old gaps, like on most charts, get filled (blue boxes) rather consistently. There were 7 noteworthy gaps that were filled above and there are now only 2 open gaps on this chart (red boxes). I would expect the gap just below 138 to get filled sooner rather than later, and at some point I suspect the S&P 500 will have to deal with the one down near 129.
We have talked about this before but RevShark posted a new chart in the forum yesterday that I wanted to share. August is normally one of the worst performing months of the year historically, but for some reason it has a very good record during election years.
I had mentioned this before too - while August may have the wind behind it his election year, the GDP is still just 1.5%, the 10-year yield is less than 2%, and the unemployment rate is over 8%. That combination hasn't happened too often historically, if ever, so we'll have to see what kind of an August we get. So far it has been pretty good.
A couple other things to note: The yield on the 10-year Treasury pushed above 1.6% and the 50-day EMA yesterday, and that sent the F-fund lower since bond prices move inversely to yields.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
And oil is making another move higher and is now testing the 200-day EMA. A break above that would be bullish for oil, but you can see that it did have trouble staying above it on the first try.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As I mentioned yesterday, with the S&P 500 hitting resistance and the charts looking like a slam dunk for a pullback, the surprise would be a move higher. The market loves to keep us guessing and continued strength would probably be the least expected result. I'm looking for a pullback but I wouldn't be surprised to be wrong about that.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.html
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 rallied for a third straight day yesterday as the Dow picked up 51-points. But for a second straight day some late selling took away about half its early gains.
[TABLE="align: center"]
[TR]
[TD]
[TD="align: center"] Daily TSP Funds Return
[TABLE="align: center"]
[TR]
[TD="align: right"] G-Fund:
[/TD]
[TD] +0.004%
[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:
[/TD]
[TD] - 0.27%
[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:
[/TD]
[TD] +0.51%
[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:
[/TD]
[TD] +0.90%
[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:
[/TD]
[TD] +0.71%
[/TD]
[/TR]
[TR]
[TD="colspan: 2, align: right"]
[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 is still flirting with the upper end of its rising wedge, and poked through the resistance intra-day before falling back into the wedge late.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The last 4 days have been very similar to a 4 day stretch we saw in late June / early July. We'll have to see if it plays out the same way, which wouldn't be very bullish for stocks since the last time the S&P went down for 6 consecutive days. Of course back then we were heading into a holiday week and there was a jobs report in there, and this week the schedule is much less eventful.
I was looking at the the SPY, the ETF that follows the S&P 500, and on this chart you can see the gaps more clearly because of the way it is traded. Anyway, Friday's big rally produced small gaps on the Nasdaq and the Russell 2000, while the S&P 500 chart above doesn't show one. But on the ETF it does.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
You can see that the old gaps, like on most charts, get filled (blue boxes) rather consistently. There were 7 noteworthy gaps that were filled above and there are now only 2 open gaps on this chart (red boxes). I would expect the gap just below 138 to get filled sooner rather than later, and at some point I suspect the S&P 500 will have to deal with the one down near 129.
We have talked about this before but RevShark posted a new chart in the forum yesterday that I wanted to share. August is normally one of the worst performing months of the year historically, but for some reason it has a very good record during election years.
I had mentioned this before too - while August may have the wind behind it his election year, the GDP is still just 1.5%, the 10-year yield is less than 2%, and the unemployment rate is over 8%. That combination hasn't happened too often historically, if ever, so we'll have to see what kind of an August we get. So far it has been pretty good.
A couple other things to note: The yield on the 10-year Treasury pushed above 1.6% and the 50-day EMA yesterday, and that sent the F-fund lower since bond prices move inversely to yields.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
And oil is making another move higher and is now testing the 200-day EMA. A break above that would be bullish for oil, but you can see that it did have trouble staying above it on the first try.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As I mentioned yesterday, with the S&P 500 hitting resistance and the charts looking like a slam dunk for a pullback, the surprise would be a move higher. The market loves to keep us guessing and continued strength would probably be the least expected result. I'm looking for a pullback but I wouldn't be surprised to be wrong about that.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.html
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.
