12/23/11
Stocks remained buoyant all day in a typical, low volume, holiday trading day. The Dow closed up 62-points.
For the TSP, the C-fund gained 0.85% yesterday, the S-fund was up 0.87%, the I-fund made 0.63%, and the F-fund (bonds) added 0.06%.
The S&P 500 continues to form the right shoulder of an inverted head and shoulders pattern and the seasonal strength is about to run into some resistance from the descending trend line. It makes for an interesting scenario. The PMO indicator moved back into the buy zone.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Dow Transportation Index (the market leader) is looking very nice with its clearly defined inverted head and shoulders pattern and rising support holding up.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The TSP Talk Sentiment Survey came in at 71% bulls, 19% bears, for a bulls to bears ratio of 3.74 to 1. That is the highest ratio since this same week last year in December 2010. The 3.71 to 1 ratio is a big sell signal in a bear market which means the system will remain 100% G Fund for the week of 12/27/11 - 12/30/11, but last year the seasonality won out and we saw modest gains in the last week of 2010 - and actually the following two weeks as well.
Here is the seasonality chart specifically for the days surrounding the Christmas NYSE holiday. This year the market will be closed on Monday December 26.
Chart provided courtesy of www.sentimentrader.com
You can see that next week poses the best prospects for positive returns but this week hasn't been bad at all so far.
Thanks for reading! Have a great holiday weekend. Merry Christmas, Happy Hanukkah, Happy Holidays, or Happy whatever you are celebrating! We'll see you next week.
Tom Crowley
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.
