5/25/12
Stocks struggled to find direction yesterday, and luckily for the bulls, the last direction was up as the Dow gained 34-points on the day after being down sharply just a of couple hours earlier.
[TABLE="align: center"]
[TR]
[TD]
[TD="align: center"] Daily TSP Funds Return
[TABLE="align: center"]
[TR]
[TD="align: right"] C-fund:
[/TD]
[TD] +0.16%
[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:
[/TD]
[TD] +0.21%
[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:
[/TD]
[TD] - 0.08%
[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:
[/TD]
[TD] - 0.14%
[/TD]
[/TR]
[TR]
[TD="align: right"] G-Fund:
[/TD]
[TD] +0.004%
[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 is doing everything it can to hang onto that 200-day EMA. This recent move off of the lows is either a consolidation before a move higher, or possibly a bear flag, which tend to break downward. That's why the 200-day EMA is so important. If it holds there won't be a bear flag breakdown.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transportation Index made an important move back above the 200-day EMA and the descending resistance line.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Both developments above seem positive, but I am concerned that this could be just a holiday trading fake-out. As we talked about the other day, the market has a tendency to reverse the pre-holiday action, after the holiday.
The mood of the market seems somber from the serious problems in Europe, to the very disappointing Facebook IPO, and it wouldn't seem like a surprise if the market tanked after Memorial Day weekend. But while the indicators have come off their extreme oversold conditions, many are still suggesting the market could have more room to run.
This particular indicator shows that corporate insiders are buying at a pretty good pace. In 2008 they were caught on the wrong side a few times, but more often this group of "smart money" tends to buy at the right time.
Chart provided courtesy of www.sentimentrader.com
Thanks for reading! Have a great holiday weekend!
Tom Crowley
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