TSP Talk Weekly Wrap Up

12/24/11

Santa Claus Rally Shows Up Right on Queue

Stocks spent the week in a steady, low volume, holiday rally.

For the TSP, the C-fund gained 3.80% on the week, the S-fund was up 3.48%, the I-fund added 2.27%, while the F-fund (bonds) lost 0.62%, and the G-fund was up 0.03%.

For the month, the C-fund is now up 1.63% in December, the S-fund has gained 0.70%, the I-fund is still off 2.82%, while the F-fund (bonds) is up 0.27%, and the G-fund has made 0.11%.

Although there wasn't much conviction because of the low volume, the S&P 500 did break to the upside of the descending trend line, which of course is positive. As is the fact that the index is back above the 20, 50, and 200-day EMA's.

Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

We have an inverted head and shoulders pattern, which is also bullish since they tend to break to the upside.

Whatever you think of this market, the strong positive seasonality surrounding Christmas Day should be a major consideration.

Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk

Many traders take this time of year off leaving mostly investors and money managers trying to pad their portfolios with winners. The light volume could pose a problem should any bad news spring up as it will be easier to move the market.

Have a Merry Christmas and a happy holiday weekend!

Good luck, and thanks for reading. We will be back here next week with another TSP Wrap Up.

Tom Crowley
www.tsptalk.com
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[nnuut]

Tom this is the third Inverse Head and Shoulders I have bet on, the first two failed miserably and I dropped from +8 % to an all time low of over -16% loss for the year. WOW I'm still hanging in on this one and have high hopes that the trend will turn around and we get a real pop from this one.
Caution:
Don't follow my moves because they have historically been wrong and I hold no responsibility for monetary losses resulting from the fools that follow my recommendations.

 

[tsptalk]

It was a tough year for TA, but one thing is certain, if people give up on it, it will start working again - Kind of like successful systems. If they havea bad stretch, people give up, and the system starts doing well again. Crazy game we play.

Inverse H&S work better if the longer term trend is up. I think we're trying to determine if we have a new uptrend.