TSP Talk Weekly Wrap Up

Best week of 2012

Stocks rallied last week with the help of some bailout optimism for Spain, but next week will be a big one for Europe and investors await potential major developments so hang on.

Here are the TSP fund returns for the week of June 4 through 8.

The S&P 500 saw some positive technical action last week as it moved above both the 200-day Simple Moving Average and the 200-day Exponential Moving Average, plus the declining trend line that looks like a break from a falling wedge pattern. All good signs, but the 50-day EMA looms above and that isn't always a friendly meeting during a weak market.

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

The NYSE overbought / oversold indicator is leaning overbought, but nothing extreme yet.

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

But during bear markets and corrections, that +500 level can be tough to crack.

We've had a nice rally and the question is, have we seen the lows of this correction or is this just an oversold rally that will run its course? Keep an eye on those moving averages. They may tell the story.

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
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[Boghie]

Tom,

The U.S. market (at least) moved because of elections. I think folks are starting to realize that folks will take tough medicine. They won't like it, but they will take it.

Now, Europe. Not so much...

And, who cares about Spain. Europe is Germany and England and Switzerland now. Nobody else across the pond matters. When the other nations start to fall they will be economically colonized. If our leviathan moves a bit quicker we will be doing the colonization. I think we have turned and are gaining headway.

 

[RealMoneyIssues]

Have we had a correction?

Not yet... Let's see where we are after OptionsEx week...

What could possibly fuel a rally from here? This isn't October 4th when a potential close below ~1075 would have officially signaled a bear market and panic (more than what was already there) would have been catastrophic for the markets. The US isn't recovering fast enough, we are coming against another debt ceiling debate, presidential elections between polarizing groups, and Birchtree is amazingly quiet on the forum.

In all seriousness, it will take a significant even to have another 2012 qtr 1 -like rally, but it won't take much for this market to be officially declared in a correction. I don't think we are going to enter a bear market, I just don't think we "have turned and are gaining headway."

Just my 2 cents.

Only time will tell.

 

[Boghie]

RMI,

My 'turned and are gaining headway' comment is very long term. Not quarter by quarter. It is year over year. Someone has to turn and gain headway. Will it be Greece, Spain, Italy, England, Germany, or the good old U.S.. My guess is it will be a combo of U.S. England, and Australia. And, you can see it in the comparison. And, the Wisconsin and California elections are pointing the way. We shall see if this economy is made for turning, eh.

 

[RealMoneyIssues]

RMI,

My 'turned and are gaining headway' comment is very long term. Not quarter by quarter. It is year over year. Someone has to turn and gain headway. Will it be Greece, Spain, Italy, England, Germany, or the good old U.S.. My guess is it will be a combo of U.S. England, and Australia. And, you can see it in the comparison. And, the Wisconsin and California elections are pointing the way. We shall see if this economy is made for turning, eh.

Elections or no elections; here, Greece, France, doesn't matter... What matters is that we have to make drastic changes in our budget (revenue AND spending) and THAT is not going to be popular with the "government should take care of me from cradle to grave" people because social programs will have to be cut. No one who is elected, and wants to be re-elected, is going to make those tough decisions. THAT is the main reason why the can keeps getting kicked down the road...

Well, the road is about to end and many people can see the desert past where the road ends...

More road would be nice...




Because we want it to end like this (I know I do)