One down, one to go
It was another good week for the stock market last week but the action was quite choppy as the recent economic data is not setting the world on fire. We are getting a nice oversold bounce after the 15% correction, and the question remains whether this is going to prove to be more than a short-term rebound.
For the week, the TSP stock funds saw respectable gains. The C-fund added 2.29%, the S-fund was up 2.41%, and the I-fund led the way again with a gain of +3.63%. Bonds (F-fund) was up 0.21%, and the G-fund added 0.06%.
For the month, the C-fund is up 2.69%, the S-fund has gained 1.52%, and the I-fund had made 4.59%. The 2.4% gain in the C-fund last week moved it back into the green for 2010. The F-fund is up 0.64% in June, and the G-fund is up 0.09%.
Since the successful double bottom test near 1042 on June 8, the S&P 500 has rallied over 7% in just 8-days. What can we expect next?
The S&P 500 broke through the 200-day EMA this past week, which is a big plus, but so far it has had a difficult time negotiating the 50-day EMA.
Charts provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Why is the 50-day EMA so important? When the market is trending strongly, you can almost set your watch to it as it tends to act as support when the S&P 500 is trading above it, and acts as resistance when trading below it. The chart from 2006 illustrates how much of an influence it can be.
With the S&P currently trading below the 50-day EMA, the resistance will be tough to break through. Even if it does move above it, I like to see at least three closes above it to confirm the break. You can see above that there can be short, failed breaks before the original trend resumes.
As we mentioned last week, we are seeing signs of life in this market, but so far it has been little more than an oversold bounce. This week’s action will go a long way in helping us determine if this rally needs to be sold, or if it is the start of something more bullish heading into the summer months.
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
--------------------------------------
TSP Talk does not guarantee the accuracy or completeness of this report, nor does TSPtalk.com assume any liability for any loss that may result from reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice and are for general information only.
The information contained on this website is for educational purposes only and not intended to be recommendations, and may not be published, broadcast, rewritten or otherwise distributed without prior written consent from TSPtalk.com. Full Disclaimer
It was another good week for the stock market last week but the action was quite choppy as the recent economic data is not setting the world on fire. We are getting a nice oversold bounce after the 15% correction, and the question remains whether this is going to prove to be more than a short-term rebound.
For the week, the TSP stock funds saw respectable gains. The C-fund added 2.29%, the S-fund was up 2.41%, and the I-fund led the way again with a gain of +3.63%. Bonds (F-fund) was up 0.21%, and the G-fund added 0.06%.
For the month, the C-fund is up 2.69%, the S-fund has gained 1.52%, and the I-fund had made 4.59%. The 2.4% gain in the C-fund last week moved it back into the green for 2010. The F-fund is up 0.64% in June, and the G-fund is up 0.09%.
Since the successful double bottom test near 1042 on June 8, the S&P 500 has rallied over 7% in just 8-days. What can we expect next?
The S&P 500 broke through the 200-day EMA this past week, which is a big plus, but so far it has had a difficult time negotiating the 50-day EMA.
Charts provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Why is the 50-day EMA so important? When the market is trending strongly, you can almost set your watch to it as it tends to act as support when the S&P 500 is trading above it, and acts as resistance when trading below it. The chart from 2006 illustrates how much of an influence it can be.
With the S&P currently trading below the 50-day EMA, the resistance will be tough to break through. Even if it does move above it, I like to see at least three closes above it to confirm the break. You can see above that there can be short, failed breaks before the original trend resumes.
As we mentioned last week, we are seeing signs of life in this market, but so far it has been little more than an oversold bounce. This week’s action will go a long way in helping us determine if this rally needs to be sold, or if it is the start of something more bullish heading into the summer months.
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
--------------------------------------
TSP Talk does not guarantee the accuracy or completeness of this report, nor does TSPtalk.com assume any liability for any loss that may result from reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice and are for general information only.
The information contained on this website is for educational purposes only and not intended to be recommendations, and may not be published, broadcast, rewritten or otherwise distributed without prior written consent from TSPtalk.com. Full Disclaimer
