11/17/11
Stocks dropped yesterday on more, you guessed it, eurozone fears. After climbing from an early steep loss back into positive territory, the market dove into the close and the Dow finished down 190-points.
For the TSP, the C-fund lost 1.63% yesterday, the S-fund fell 1.57%, the I-fund dropped 1.38%, and the F-fund (bonds) added 0.11%.
The S&P 500 remained in the triangle and above the 50 and 200-day EMA's, but slipped just below the 20-day EMA. It is now testing the bottom of the triangle.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
I have been expecting something like this to occur...
... but it is getting a little late in the game for a fake-out and breakout as the S&P nears the apex of the triangle.
Yesterday's reaction to more concerns out of Europe, and how much contagion might be in U.S. financial institutions, pulled the euro down and lifted the dollar. As we know, a rising dollar has been having a negative impact on our stock market, and this pattern has been going on for quite some time. UUP below (green) is a U.S. dollar ETF.
The small caps of the Russell 2000 have had a nice run since the early October lows, and it has also formed a very symmetrical triangle pattern that is only a day or two away from having to break one way or the other. When investors are optimistic they are more apt to jump on the aggressive small caps so it will be interesting to see which way this month-long consolidation breaks.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The NYSE overbought / oversold indicator is back in neutral territory and hasn't become overly oversold since the first week in October. Any more selling will likely break the recent rising trend off of that oversold low. Strong bull markets do tend to avoid being oversold before rallying so here again is another test for this market.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The smart money of the OEX options put / call ratio has been getting a little more bullish recently as the daily reading is up near 1.0 again, while the slower moving 10-day moving average has come off of its 2.0 lows.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The daily reading could indicate that a short-term rebound could be coming, but the 10-day moving average tends to rise while the market is falling. This isn't an overly bullish sign at the moment, but it does mean that the smart money is at least preparing for a possible future rally. They like to be most bullish near market bottoms and the 10-day moving average is kind of in no man's land right now, sitting at 1.64.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
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. It is shaping up to look like a very unmerry christmas.. I am seriously considering just cashing out my TSP and buying some land. Really. Or maybe just just pick up a millionaire, or two, at a bar and keep them that at my cabin 'till they cough it up 
, hahaha. seem's like a better retirment plan than this roller coaster. Ocuppy (did i spell that right?) wall street? I say let's sell it all off and we split the proceed's. LOL!!! Have a nice rest of 2011 everyone. Peace out.
