10/05/12
Stocks rallied out of the gate Thursday morning, and the Dow held onto about an 80-point gain for most of the day. Some were saying that it was a reaction to Wednesday's debate, but the weak dollar certainly had a hand in it.
[TABLE="align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"]
Daily TSP Funds Return[TABLE="width: 150"]
[TR]
[TD="align: right"] G-Fund:
[/TD]
[TD="align: right"] 0.0036%
[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:
[/TD]
[TD="align: right"] -0.14%
[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:
[/TD]
[TD="align: right"] 0.72%
[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:
[/TD]
[TD="align: right"] 0.73%
[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:
[/TD]
[TD="align: right"] 0.76%
[/TD]
[/TR]
[/TABLE]
[TABLE="align: center"]
[TR]
[TD="align: right"]
[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 broke to the upside of the recent triangle formation and it is now running right into the 1460 - 1465 area that has been resistance for nearly a month. The bear flag did not materialize, or at least it did not break to the downside as bear flags normally do, but today's (Friday) jobs report could still do some damage if it's worse than expected.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar seems to finally be breaking down from its bear flag which is one reason why stocks broke to the upside of their bear flag - at least on the S&P 500.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
But the small caps of the Russell 2000 are not out of the woods yet as its bear flag is still very much intact. Normally a leader, the small caps are now looking to follow in the footsteps of the S&P 500.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transportation Index seems to have escaped its bear flag and is now heading back toward the top of its trading channel.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Talk about the indices telling different stories; I can't remember the last time I saw the S&P 500, the small caps, and the Dow Transportation index less in sync.
Revshark posted this in his Afternoon Commentary yesterday.
"If we are undergoing a topping process then what we are seeing now is what I call the ‘suck in’. The market beast needs some fresh meat and action like this will draw them and raise the level of complacency. The bearish view in these sorts of situations has been consistently wrong in recent years but the conditions are ripe for this bounce to eventual fail."
I mentioned something similar many weeks ago and it has taken a long time to play out, but I agree, there seems to be signs that this market could be running out of steam, particularly if we see another emotional push higher from the jobs report.
One reason for the concern is the surprisingly overly bullish sentiment survey results this week.
The TSP Talk Sentiment Survey came in at 63% bulls, 26% bears, for a bulls to bears ratio of 2.42 to 1. That is a Sell Signal and that is the first sell signal since April, and only the 2nd week we saw a bull to bear ratio over 2.0 to 1. The survey system will move to a 100% G fund allocation for the week of 10/09/12 - 10/12/12.
This morning we will get the September jobs report and current estimates are looking for a gain of 120,000 jobs, and an unemployment rate of 8.1%. Briefing.com is looking for 165,000 jobs and 8.2% unemployment.
The TSP offices, as well as the bond market, will be closed on Monday for Columbus Day, despite the stock market remaining open. That means Tuesday's share prices will reflect the market index changes from Monday and Tuesday.
Thanks for reading! Have a great weekend!
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 out of the gate Thursday morning, and the Dow held onto about an 80-point gain for most of the day. Some were saying that it was a reaction to Wednesday's debate, but the weak dollar certainly had a hand in it.
[TABLE="align: center"]
[TR]
[TD]
[TD="align: center"]
Daily TSP Funds Return[TABLE="width: 150"]
[TR]
[TD="align: right"] G-Fund:
[/TD]
[TD="align: right"] 0.0036%
[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:
[/TD]
[TD="align: right"] -0.14%
[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:
[/TD]
[TD="align: right"] 0.72%
[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:
[/TD]
[TD="align: right"] 0.73%
[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:
[/TD]
[TD="align: right"] 0.76%
[/TD]
[/TR]
[/TABLE]
[TABLE="align: center"]
[TR]
[TD="align: right"]
[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 broke to the upside of the recent triangle formation and it is now running right into the 1460 - 1465 area that has been resistance for nearly a month. The bear flag did not materialize, or at least it did not break to the downside as bear flags normally do, but today's (Friday) jobs report could still do some damage if it's worse than expected.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar seems to finally be breaking down from its bear flag which is one reason why stocks broke to the upside of their bear flag - at least on the S&P 500.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
But the small caps of the Russell 2000 are not out of the woods yet as its bear flag is still very much intact. Normally a leader, the small caps are now looking to follow in the footsteps of the S&P 500.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transportation Index seems to have escaped its bear flag and is now heading back toward the top of its trading channel.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Talk about the indices telling different stories; I can't remember the last time I saw the S&P 500, the small caps, and the Dow Transportation index less in sync.
Revshark posted this in his Afternoon Commentary yesterday.
"If we are undergoing a topping process then what we are seeing now is what I call the ‘suck in’. The market beast needs some fresh meat and action like this will draw them and raise the level of complacency. The bearish view in these sorts of situations has been consistently wrong in recent years but the conditions are ripe for this bounce to eventual fail."
I mentioned something similar many weeks ago and it has taken a long time to play out, but I agree, there seems to be signs that this market could be running out of steam, particularly if we see another emotional push higher from the jobs report.
One reason for the concern is the surprisingly overly bullish sentiment survey results this week.
The TSP Talk Sentiment Survey came in at 63% bulls, 26% bears, for a bulls to bears ratio of 2.42 to 1. That is a Sell Signal and that is the first sell signal since April, and only the 2nd week we saw a bull to bear ratio over 2.0 to 1. The survey system will move to a 100% G fund allocation for the week of 10/09/12 - 10/12/12.
This morning we will get the September jobs report and current estimates are looking for a gain of 120,000 jobs, and an unemployment rate of 8.1%. Briefing.com is looking for 165,000 jobs and 8.2% unemployment.
The TSP offices, as well as the bond market, will be closed on Monday for Columbus Day, despite the stock market remaining open. That means Tuesday's share prices will reflect the market index changes from Monday and Tuesday.
Thanks for reading! Have a great weekend!
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.
