04/26/13
Stocks rallied sharply in morning trading on Thursday, and held onto those gains until late in the afternoon. The indices finished with decent gains, but there was clearly a desire to sell near the prior highs. The Dow closed up 24-points.
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[TD="align: center"]Daily TSP Funds Return[TABLE="width: 153"]
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[TD]G-Fund:[/TD]
[TD="align: right"]+0.0035%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]-0.04%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]+0.41%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]+0.66%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]+0.76%[/TD]
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[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 and SPY narrowly missed toughing the previous April high before backing off and creating a possible negative reversal day. After 5 consecutive days of gains, it looks like the index could face some pressure on Friday if the reversal day plays out, although after the close on Thursday, and before the futures market closed at 4:15 PM ET, the futures rallied so fair value will produce an open of about 40 Dow points above what the futures are saying. For example, if the morning Dow futures are up 10-points, the Dow would open up closer to 50-points.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The SPY may be in a trading range between 154 ad 160, in which case doing a little trading might work until one side or the other breaks down. Buy 154-155 and sell 159-160?
I am using some artistic liberties with the longer-term resistance line below in red, looking for potential resistance and a reason why we may have seen stocks back off late yesterday. The break above that red line earlier this month could have been a fake-breakout from a rising wedge (red) which could mean a test of the bottom of the wedge is coming. Another close above that red line will make that theory moot.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Of course the other argument is that the S&P is looking to make new highs and this is just a typical breakout. We'll see.
The Nasdaq is in a similar situation - testing the prior highs and backing off after a 5-day rally.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The 5-day rally took many of the the short-term indicators into overbought territory so the pressure is on a little for the upside.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
It's not shown, but the slightly longer-term indicators are not showing any problems and are still neutral.
Bonds have still not been able to break to new highs after almost 2 weeks of trying. There is some rising support coming up on this TLT bond fund ETF so we could find out pretty quickly if bonds are going to rollover of reach for new highs.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Basically the market indices are at a point where they have to prove they have the strength to push through to new highs, or if the strong 5-day rally has taken too much out of them and a pause or pullback is needed. As I mentioned above, we could buy the bottom of the recent range, and sell the top until the market decides which way it is going to break, but with 2 IFT's a month, it may not work for us.
Thanks for reading! Have a great weekend!
Tom Crowley
Posted daily at TSP Talk Market Commentary
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 sharply in morning trading on Thursday, and held onto those gains until late in the afternoon. The indices finished with decent gains, but there was clearly a desire to sell near the prior highs. The Dow closed up 24-points.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 153"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0035%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]-0.04%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]+0.41%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]+0.66%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]+0.76%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 and SPY narrowly missed toughing the previous April high before backing off and creating a possible negative reversal day. After 5 consecutive days of gains, it looks like the index could face some pressure on Friday if the reversal day plays out, although after the close on Thursday, and before the futures market closed at 4:15 PM ET, the futures rallied so fair value will produce an open of about 40 Dow points above what the futures are saying. For example, if the morning Dow futures are up 10-points, the Dow would open up closer to 50-points.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The SPY may be in a trading range between 154 ad 160, in which case doing a little trading might work until one side or the other breaks down. Buy 154-155 and sell 159-160?
I am using some artistic liberties with the longer-term resistance line below in red, looking for potential resistance and a reason why we may have seen stocks back off late yesterday. The break above that red line earlier this month could have been a fake-breakout from a rising wedge (red) which could mean a test of the bottom of the wedge is coming. Another close above that red line will make that theory moot.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Of course the other argument is that the S&P is looking to make new highs and this is just a typical breakout. We'll see.
The Nasdaq is in a similar situation - testing the prior highs and backing off after a 5-day rally.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The 5-day rally took many of the the short-term indicators into overbought territory so the pressure is on a little for the upside.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
It's not shown, but the slightly longer-term indicators are not showing any problems and are still neutral.
Bonds have still not been able to break to new highs after almost 2 weeks of trying. There is some rising support coming up on this TLT bond fund ETF so we could find out pretty quickly if bonds are going to rollover of reach for new highs.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Basically the market indices are at a point where they have to prove they have the strength to push through to new highs, or if the strong 5-day rally has taken too much out of them and a pause or pullback is needed. As I mentioned above, we could buy the bottom of the recent range, and sell the top until the market decides which way it is going to break, but with 2 IFT's a month, it may not work for us.
Thanks for reading! Have a great weekend!
Tom Crowley
Posted daily at TSP Talk Market Commentary
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.
