12/20/11
Another positive open turns sour as the day wore on and investors do not seem to be in any mood to buy the dips. The Dow lost 100-points on the day, closing near the lows.
For the TSP, the C-fund dropped 1.17% yesterday, the S-fund lost 1.79%, the I-fund fell 1.40%, and the F-fund (bonds) gained 0.13%.
The S&P 500 is flirting with danger as it trades yet another day below the three major moving averages. The next two weeks will likely be affected by the low volume holiday trading and we know the holiday bias is very positive. However, the low volume environment will make technical analysis somewhat less effective where the indices can be easily pushed around.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq reached further down toward its open gap and the rising support line.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transports, which I praised yesterday for leading the way with a positive technical setup, put in a negative outside day (higher high and lower low than Friday's range.) It is now close to again testing the rising support like the others.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
One of the "dumb money" put / call ratios moved down to a level that we saw prior to two different sharp market rallies this past fall. This is a good sign for a rally this week, but as we saw in June and August, this indicator can also go a lot lower.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Here is the seasonality chart specifically for the days surrounding the Christmas NYSE holiday. This year the market will be closed on Monday December 26.
Chart provided courtesy of www.sentimentrader.com
You can see that next week poses the best prospects for positive returns but this week isn't bad considering Friday's (day -1) historical strength.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
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