8/27/12
Stocks rallied on Friday salvaging some of the week's earlier losses. The Dow gained 101-points on the day but there may be resistance waiting for some of the indices as we start the new week.
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[TD="align: right"] 0.0036%[/TD]
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[TD="align: right"] -0.07%[/TD]
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[TD="align: right"] 0.66%[/TD]
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[TD="align: right"] 0.36%[/TD]
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[TD="align: right"] -0.07%[/TD]
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The S&P 500 bounced off of the 20-day EMA but the rally ran into the overhead resistance, which had been the support of the recent rising wedge.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
On the weekly chart, the S&P 500 is looking at some stiff longer-term resistance and I suspect it may have at least short-term trouble getting above it, but if it can eventually move above that resistance, it looks like the next 100-points in the S&P will be easy. The hard part will be breaking out.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The chart of the market leader Dow Transportation Index looks a bit shaky here as the price of oil moves into the high 90's again.
This triangle formation saw a failed breakout to the upside. These "fake-outs" tends to lead to a breakdown in the opposite direction. We'll have to see if that clump of EMA's (20, 50, and 200) can support it and avert a trip to the bottom of the triangle.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The yield on the 10-year Treasury note pulled back from its recent highs but on Friday it seemed to find at least support at the 50-day EMA. Two open gaps were filled during the pullback but now there are two large gaps that remain open - one on the upside, one on the downside.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The pullback in yields propelled the bond fund off of the long term rising support. There is an open gap below near 111 on this chart, but it is hard to bet against a trend like this.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The PMO indicator has curled up and it looks like bonds want to continue higher after the recent pullback.
The dollar chart looks bearish, but the UUP was able to close back above the 200-day EMA so we could see a relief rally and an attempt to fill the open gap near 22.65.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
If the dollar fills that gap a I would suspect stocks would be sluggish, but that is a very short-term outlook. Looking out a little further than a few days...
According to sentimenTrader.com:
"The S&P 500 tracking fund, SPY, opened for trading below Thursday's low, sinking below the lowest close of the past two weeks, and reversed to close above Thursday's high. That has resulted in further gains over the next three weeks 9 out of 10 times, averaging +1.6%."
I am seeing so many different scenarios, short, long, and intermediate term. I feel my commentaries are getting schizophrenic because depending on the time frame, I have a totally different outlook. The election is surely going to have an impact and with the conventions coming up, we could see some emotional swings. I just hope the charts can give us a heads up as to which way the news will take the indices.
Administrative note: I have been asked many times why I don't post my current allocation in my commentary. As some of the old timers may recall, I stopped sharing my allocation back when RevShark, Trader Fred, and the Ebbchart went to a premium service. The reason was that I seriously consider the suggested IFT's of our premium services when making my decision so I didn't think it was fair to disclose that info with others paying for the premium services. We now have the TSP & Economic Report and of course the very popular Intrepid Timer Strategies service.
I may have found a way to get around that problem. I am considering a new TSP Talk premium service. Basically it will be a cheap (less expensive than the other services), quick supplement to my current daily commentary with perhaps some extra tidbits, but I will also discuss allocations and more specific TSP strategy.
But there's a catch. I will call it something like Premium "Extra" because it will only be available to members who are subscribed to another premium service. You can’t subscribe only to this service.
I have a lot of confidence in the current services we offer and loyal subscribers may not need this "Extra" service. But many of our subscribers subscribe to more than one service and when the signals conflict, it can be a confusing situation. I won't give the IFT info of the other service, but perhaps a little extra info can help some folks make a decision.
I'm sure I'll get both negative and positive feedback on this. I haven't fully committed to it yet because my plate is pretty full already. If I do it, as I said it will likely be a very short supplement to the current commentary and again it will only be available to subscribers of one or more of our other services. I am figuring on the cost being in the $11 - $15 a month range.
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.
