Finally, a real pullback
After nearly three months of virtually straight up action, the stock market took a break last week caused by the unrest in the Middle East and some mixed economic reports.
The price of oil is back in the headlines, and like the dollar a few weeks ago, the market seems to be moving inversely to the price of a barrel of oil, which moved over $100 at one point last week.
For the TSP, both the the C-fund and the S-fund lost 1.67% on the week, and the I-fund dropped 1.49%. Bonds became a safe haven as the F-fund added 0.69%, and the G-fund was up another 0.06%.
For the month of February, the C-fund is still up 2.84%, the S-fund has gained 4.31%, and the I-fund is up 2.28%. Bonds (F-fund) is now up 0.10%, and the G-fund is up 0.20%.
The rule in a bull market is to buy the dips and a 2 to 3 day pullback is usually the opportunity.
For the S&P 500, the pullback found support near the longer-term rising trendline and it also held above the 50-day EMA, both very good technical signs. Friday's positive action makes it appear that the rally could be ready to resume, but there's no doubt that volatility is back and we'll want to see the S&P reclaim that old support line, which could act as resistance on the way back up.
Chart provided courtesy of www.decisionpoint.com
Not surprisingly, we saw a jump in negative sentiment to the point where it could be a positive for stocks. During a strong bull market like we have been in, a bulls to bears ratio near 1 to 1 is usually enough to spark some buying.
Chart provided courtesy of www.decisionpoint.com
As you can see, the last time bearish sentiment was over 35%, the summer pullback bottomed out and the market really took off.
The economic data has not been overwhelming and the trouble in the Middle East is heating up so there seems to be catalysts for a more prolonged correction, but investors ave become bearish awfully quickly, and that is one of my favorite indicators to be a buyer rather than a seller.
Good luck, and thanks for reading. We will be back here next week with another TSP Wrap Up.
Tom Crowley
www.tsptalk.com
Weekly Wrap-Ups Archive
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.
After nearly three months of virtually straight up action, the stock market took a break last week caused by the unrest in the Middle East and some mixed economic reports.
The price of oil is back in the headlines, and like the dollar a few weeks ago, the market seems to be moving inversely to the price of a barrel of oil, which moved over $100 at one point last week.
For the TSP, both the the C-fund and the S-fund lost 1.67% on the week, and the I-fund dropped 1.49%. Bonds became a safe haven as the F-fund added 0.69%, and the G-fund was up another 0.06%.
For the month of February, the C-fund is still up 2.84%, the S-fund has gained 4.31%, and the I-fund is up 2.28%. Bonds (F-fund) is now up 0.10%, and the G-fund is up 0.20%.
The rule in a bull market is to buy the dips and a 2 to 3 day pullback is usually the opportunity.
For the S&P 500, the pullback found support near the longer-term rising trendline and it also held above the 50-day EMA, both very good technical signs. Friday's positive action makes it appear that the rally could be ready to resume, but there's no doubt that volatility is back and we'll want to see the S&P reclaim that old support line, which could act as resistance on the way back up.
Chart provided courtesy of www.decisionpoint.com
Not surprisingly, we saw a jump in negative sentiment to the point where it could be a positive for stocks. During a strong bull market like we have been in, a bulls to bears ratio near 1 to 1 is usually enough to spark some buying.
Chart provided courtesy of www.decisionpoint.com
As you can see, the last time bearish sentiment was over 35%, the summer pullback bottomed out and the market really took off.
The economic data has not been overwhelming and the trouble in the Middle East is heating up so there seems to be catalysts for a more prolonged correction, but investors ave become bearish awfully quickly, and that is one of my favorite indicators to be a buyer rather than a seller.
Good luck, and thanks for reading. We will be back here next week with another TSP Wrap Up.
Tom Crowley
www.tsptalk.com
Weekly Wrap-Ups Archive
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.
