Stocks rallied again on Wednesday as the positive seasonality has not disappointed this year. The Dow gained another 185-points and this time small caps and the I-fund performed as well or better. The seasonal advantage continues into next week but in more recent years, a positive week before Christmas has more often than not led to a little weakness the week after.
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The strong holiday seasonality is playing out nicely so far, and while there is a lot more green showing on this and the December charts through the end of the month, as I mentioned above, the more recent years' tendency has been to see stocks move in one direction the week before Christmas, and in the other the week after, although the overall bias has been positive.. This chart includes data from 1950-2011.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
The SPY (S&P 500 / C-Fund) gapped up keeping the Santa Claus rally alive and well. It's back above the 50-day EMA and testing some overhead resistance.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The last time the market struggled like it has this year, was back in 2011. I noticed that in 2011, December started off poorly, like it did this year, but rallied as we approached Christmas, as it is doing this year. The week after Christmas was down slightly, closing out a year that saw the S&P 500 gain only 2% while small caps lost over 3%. Sounds familiar.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
But then came January of 2012 and we saw a big gap up on the first trading day of the New Year, and the bulls took charge for the remainder of the month.
Chart provided courtesy of www.stockcharts.com,
History rarely repeats itself exactly, but this was worth noting.
The Dow Completion Index (small caps / S-Fund) broke above the resistance and falling wedge-like formation on Wednesday. The action has been good this week but it still has some technical issues.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The same with the Transports. It was a nice rally, but it is below all of the major moving averages and still in a downtrend.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) had a big day. It closed just above the 50-day EMA and nearly moved into the overhead open gap. It also opened a new gap at the open on Wednesday.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (Bonds / F-Fund) opened sharply lower but closed near break even and above the 200-day EMA. It's trying to hold on.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Thanks for reading. Have a Merry Christmas and a great weekend, and we'll see you back here next week!
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
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.
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The strong holiday seasonality is playing out nicely so far, and while there is a lot more green showing on this and the December charts through the end of the month, as I mentioned above, the more recent years' tendency has been to see stocks move in one direction the week before Christmas, and in the other the week after, although the overall bias has been positive.. This chart includes data from 1950-2011.
Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk
The SPY (S&P 500 / C-Fund) gapped up keeping the Santa Claus rally alive and well. It's back above the 50-day EMA and testing some overhead resistance.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The last time the market struggled like it has this year, was back in 2011. I noticed that in 2011, December started off poorly, like it did this year, but rallied as we approached Christmas, as it is doing this year. The week after Christmas was down slightly, closing out a year that saw the S&P 500 gain only 2% while small caps lost over 3%. Sounds familiar.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
But then came January of 2012 and we saw a big gap up on the first trading day of the New Year, and the bulls took charge for the remainder of the month.
Chart provided courtesy of www.stockcharts.com,
History rarely repeats itself exactly, but this was worth noting.
The Dow Completion Index (small caps / S-Fund) broke above the resistance and falling wedge-like formation on Wednesday. The action has been good this week but it still has some technical issues.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The same with the Transports. It was a nice rally, but it is below all of the major moving averages and still in a downtrend.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) had a big day. It closed just above the 50-day EMA and nearly moved into the overhead open gap. It also opened a new gap at the open on Wednesday.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (Bonds / F-Fund) opened sharply lower but closed near break even and above the 200-day EMA. It's trying to hold on.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Thanks for reading. Have a Merry Christmas and a great weekend, and we'll see you back here next week!
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
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.
