8/31/12
Stocks pulled back yesterday as investors showed some signs of nerves as we head into Friday's big speech from Ben Bernanke. The Dow lost 107-points on the day.
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[TD="align: center"] Daily TSP Funds Return
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[TD="align: right"] G-Fund:
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[TD="align: right"] 0.0036%
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[TD="align: right"] F-fund:
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[TD="align: right"] 0.14%
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[TD="align: right"] -0.77%
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[TD="align: right"] S-fund:
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[TD="align: right"] -0.82%
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[TD="align: right"] I-fund:
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[TD="align: right"] -0.94%
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The Dow's decline took it down to its 50-day EMA - an area that you'd expect to hold in a bull market, although it failed earlier this year and needed help from the 200-day EMA.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The S&P 500 pulled back and closed just below the 20-day EMA. We had expected a pullback from the double top near 1425 and we have been getting it, and I think a move to the bottom of the rising trading channel, which is about where the 50-day EMA is near 1380, looks like a nice convenient place to fall, but I think Ben Bernanke may have a say in whether that happens or not.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Here is the problem. We have talked about the Dow Transportation Index, the leader, lagging badly. It saw a failed breakout from its triangle formation earlier this month - typical action. Unfortunately, failed breakouts can turn into breakdowns, and right now it is testing the support. The script looks like a breakdown could be coming but we'll have to see if we get a bounce off of the rising support of the triangle.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Today's big speech from Ben Bernanke will certainly be a market mover and yesterday's sell-off may have tipped his hand... or it may be one of those "sell the rumor, buy the news" reactions.
I'm going to leave Thursday's comments below since I was late posting it on Thursday morning and I know some of you read the comments very early in the morning (or even late the night before) and may have missed all of the seasonality charts I posted.
Thanks for reading! Have a great holiday weekend!
Tom Crowley
Posted daily at www.tsptalk.com/comments.html
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