05/22/13
Stocks were up on Tuesday as we saw modest gains in most of the major indices. The Dow led the way adding 52-points and that gain made it 19 consecutive positive Tuesdays for the Dow. Amazing!
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 152"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0043%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]+0.10%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]+0.17%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]+0.13%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]+0.04%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
S&P 500 is, well, you know.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The steep upward trends continue and while we all know this can't last forever, we don't know when it will end. The indicators are very stretched to the overbought side giving us some reason to believe an end to the trend, or at least a pullback, is near.
If you tossed a coin 4 times, the odds of the result repeating 4 times in a row is about 6% or 15 to 1. But if that happened, what are the odds the next one (5th toss) repeats it again? 50% or 1 to 1.
The reason the 5th toss of a coin is 50/50 after 4 consecutive repeating results is because it is a random event (in theory). The market isn't random like a coin flip so the above isn't a great analogy, but I think you get the point. Just because the S&P has been up 11 of the last 14 days doesn't mean it has to go down now, as we have found out. But let's take the other side of that, when the result is not random. Here's what happens when a price oscillator is stretched to levels not often seen.
From sentimenTrader.com:
"On an intraday basis, we calculate a Price Oscillator, which determines how eager buyers are during the trading day.
"The Oscillator measures where each 1/2 hourly bar opens and closes in relation to its high and low. We can look at the same measure on a daily basis, then average the results over a given time frame to see just how persistent the buyers (or sellers) have been."
Chart provided courtesy of www.sentimentrader.com
"That's what the chart above depicts. It is a three-month average of the daily Price Oscillator, and it has now reached 59.5%. That means that over the past thee months, an average day has closed in the upper 40% of its range.
"That may not sound like much, but judging from the chart, it is. In the past decade, we've seen this kind of persistence only four times. The last three coincided almost exactly with an intermediate-term high in the S&P, while the prior one in November 2006 saw stocks continue higher for a bit before hitting some trouble."
Going back 30 years, you can see where the current reading stands:
Chart provided courtesy of www.sentimentrader.com
I am not very good at expressing my feelings under circumstances like this but I hope all of readers in the Oklahoma and Kansas areas are safe. The destruction from the tornadoes was inconceivable and the losses of life and property is just so difficult to comprehend. My thoughts and prayers are with all of those affected by this disaster.
Thanks for reading! We'll see you here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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.
Stocks were up on Tuesday as we saw modest gains in most of the major indices. The Dow led the way adding 52-points and that gain made it 19 consecutive positive Tuesdays for the Dow. Amazing!
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 152"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0043%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]+0.10%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]+0.17%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]+0.13%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]+0.04%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
S&P 500 is, well, you know.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The steep upward trends continue and while we all know this can't last forever, we don't know when it will end. The indicators are very stretched to the overbought side giving us some reason to believe an end to the trend, or at least a pullback, is near.
If you tossed a coin 4 times, the odds of the result repeating 4 times in a row is about 6% or 15 to 1. But if that happened, what are the odds the next one (5th toss) repeats it again? 50% or 1 to 1.
The reason the 5th toss of a coin is 50/50 after 4 consecutive repeating results is because it is a random event (in theory). The market isn't random like a coin flip so the above isn't a great analogy, but I think you get the point. Just because the S&P has been up 11 of the last 14 days doesn't mean it has to go down now, as we have found out. But let's take the other side of that, when the result is not random. Here's what happens when a price oscillator is stretched to levels not often seen.
From sentimenTrader.com:
"On an intraday basis, we calculate a Price Oscillator, which determines how eager buyers are during the trading day.
"The Oscillator measures where each 1/2 hourly bar opens and closes in relation to its high and low. We can look at the same measure on a daily basis, then average the results over a given time frame to see just how persistent the buyers (or sellers) have been."
Chart provided courtesy of www.sentimentrader.com
"That's what the chart above depicts. It is a three-month average of the daily Price Oscillator, and it has now reached 59.5%. That means that over the past thee months, an average day has closed in the upper 40% of its range.
"That may not sound like much, but judging from the chart, it is. In the past decade, we've seen this kind of persistence only four times. The last three coincided almost exactly with an intermediate-term high in the S&P, while the prior one in November 2006 saw stocks continue higher for a bit before hitting some trouble."
Going back 30 years, you can see where the current reading stands:
Chart provided courtesy of www.sentimentrader.com
I am not very good at expressing my feelings under circumstances like this but I hope all of readers in the Oklahoma and Kansas areas are safe. The destruction from the tornadoes was inconceivable and the losses of life and property is just so difficult to comprehend. My thoughts and prayers are with all of those affected by this disaster.
Thanks for reading! We'll see you here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
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.
