5/24/12
Stocks opened sharply lower yesterday, but an early 190-point decline was erased and the major indices closed mixed with the Dow losing 7-points, and the S&P 500 and Nasdaq closing up on the day.
[TABLE="align: center"]
[TR]
[TD]
[TD="align: center"] Daily TSP Funds Return
[TABLE="align: center"]
[TR]
[TD="align: right"] C-fund:
[/TD]
[TD] +0.17%
[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:
[/TD]
[TD] +0.57%
[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:
[/TD]
[TD] - 1.44%
[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:
[/TD]
[TD] +0.24%
[/TD]
[/TR]
[TR]
[TD="align: right"] G-Fund:
[/TD]
[TD] +0.004%
[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
It did not start out well, but the S&P 500 managed to close above the 200-day EMA for a third straight day. Barring any major news out of Europe, it looks like we could chop around for a while. Three up days in a declining market is where we might start getting nervous, and just how much of this rally is holiday related will remain to be seen after the holiday.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As we talked about the other day, this probably won't be a "V" bottom but rather something that tests the lows a few times, and yesterday's action may have been one of those tests. Similar to what we saw after prior pullbacks...
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transportation Index had a very strong day yesterday after leading the market to the downside recently. It has now rallied back to the 200-day EMA and the descending resistance line, so this may be a big test for the stock market in general. If the Transports cannot break through this resistance, I will not be overly optimistic about a continued recovery of the S&P 500 and other major indices.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar did breakout making a new high yesterday, which was part of the reason we saw the weakness early in stocks. This is something we should continue to watch because it may be best telling the story of the euro and Greece.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Trying to decide what to do with your TSP IFT's may be difficult in the days ahead because we could see a lot of that choppiness. The chart shows is that we are likely to see tests of the lows, rallies, pullbacks again, etc., and it will have us guessing each day near the noon ET trading deadline. Many of the indicators still have a very bullish tilt to them so am leaning toward the recent lows holding. But the how the Tranports react at its current resistance, what the holiday impact will be, and what the next development in Europe will be, could change change my thinking.
Thanks for reading! We'll see you tomorrow.
Tom Crowley
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