Stocks rallied on Tuesday as the Dow gained 106-points on the day. Was it a turnaround Tuesday giving the market yet another "V" bottom after a shallow pullback? It worked in 2013 and the trend followers will certainly be all over this. The I-fund lagged and bonds continue to bounce.
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The I-fund lagged as the dollar was up again leaving behind the large open gap on the UUP chart for now. There may be a new rising trading channel here (blue) and since the UUP is near the top of it, with that big open gap closer to the bottom, the downside may be the path of least resistance. So, if the chart is trying to tell us something, it may be that Friday's jobs report will help the dollar fill that gap.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The S&P 500 (SPY) remains in the middle of its intermediate-term rising trading channel after bouncing off of the 20-day EMA. Looks positive, but the next chart looks even better.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq looks to be trying to create yet another "V" bottom after finding support at the 20-day EMA. If that's the case, new highs may not be far off. If it's "different this time" we'll know soon enough.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
But before we get too excited about yesterday's rally, let me remind you of this chart, which is now 5 trading days away from the ... fill in the blank. I assume everyone was quite happy and bullish on 1929's equivalent to this year's January 14.
Again, the chance of something like this happening is remote, but I'm not one to ignore a good warning. If this does not scare you, then you may be one of those folks who made over 30% in 2013. Not me. I wasn't brave enough. If there is an ounce of a chance, based on technical analysis chart patterns, that this is possible, then don't blink this month. This pattern actually has a name, but for the life of me and can't recall it. One of our forum members mentioned it a couple of weeks ago and I can't find the post.
Update: Thanks, CrabClaw. It is called, "Three Peaks and Domed House", and you can read about it here... http://thepatternsite.com/3peaksdome.html
If anyone is interested in an article by money manager John Hussman on the current chances of a market crash, go to ... Estimating the Risk of a Market Crash (after reading the rest of this, of course.
)
Bond were up yet again on Tuesday and they have been taking out some of the weaker overhead resistance, but that could get tougher in the coming days. Since the trend is down, I am leaning toward them rolling by the time they test their 50 day EMAs, but if stocks do have some problems going forward, the bond market could be the beneficiary, and if you recall, bond sentiment is so bearish, they could be getting attractive.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
This Friday we get the December jobs report. Consensus estimates are looking for approximately 197,000 new jobs being created, and an unemployment rate of 7.0%. What do you think? We have our monthly jobs report contest going on in the Forum.
Read more in today's TSP Talk Plus Report. We post more charts and indicators, plus discuss the Sentiment Survey and its System. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Thanks for reading! We'll see you back here tomorrow.
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.
[TABLE="width: 80%, align: center"]
[TR]
[TD]
[TD="align: center"]Daily TSP Funds Return
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The I-fund lagged as the dollar was up again leaving behind the large open gap on the UUP chart for now. There may be a new rising trading channel here (blue) and since the UUP is near the top of it, with that big open gap closer to the bottom, the downside may be the path of least resistance. So, if the chart is trying to tell us something, it may be that Friday's jobs report will help the dollar fill that gap.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The S&P 500 (SPY) remains in the middle of its intermediate-term rising trading channel after bouncing off of the 20-day EMA. Looks positive, but the next chart looks even better.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq looks to be trying to create yet another "V" bottom after finding support at the 20-day EMA. If that's the case, new highs may not be far off. If it's "different this time" we'll know soon enough.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
But before we get too excited about yesterday's rally, let me remind you of this chart, which is now 5 trading days away from the ... fill in the blank. I assume everyone was quite happy and bullish on 1929's equivalent to this year's January 14.
Again, the chance of something like this happening is remote, but I'm not one to ignore a good warning. If this does not scare you, then you may be one of those folks who made over 30% in 2013. Not me. I wasn't brave enough. If there is an ounce of a chance, based on technical analysis chart patterns, that this is possible, then don't blink this month. This pattern actually has a name, but for the life of me and can't recall it. One of our forum members mentioned it a couple of weeks ago and I can't find the post.
Update: Thanks, CrabClaw. It is called, "Three Peaks and Domed House", and you can read about it here... http://thepatternsite.com/3peaksdome.html
If anyone is interested in an article by money manager John Hussman on the current chances of a market crash, go to ... Estimating the Risk of a Market Crash (after reading the rest of this, of course.
Bond were up yet again on Tuesday and they have been taking out some of the weaker overhead resistance, but that could get tougher in the coming days. Since the trend is down, I am leaning toward them rolling by the time they test their 50 day EMAs, but if stocks do have some problems going forward, the bond market could be the beneficiary, and if you recall, bond sentiment is so bearish, they could be getting attractive.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
This Friday we get the December jobs report. Consensus estimates are looking for approximately 197,000 new jobs being created, and an unemployment rate of 7.0%. What do you think? We have our monthly jobs report contest going on in the Forum.
Read more in today's TSP Talk Plus Report. We post more charts and indicators, plus discuss the Sentiment Survey and its System. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Thanks for reading! We'll see you back here tomorrow.
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.
