07/10/13
Stocks rallied yet again yesterday as the Dow picked up another 76-points and all of the major indices saw solid gains with the market leading Dow Transportation index jumping 2.3%.
[TABLE="width: 88%, align: center"]
[TR]
[TD="width: 305"]
[/TD]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 160"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0057%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] +0.16%[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] +0.72%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] +0.91%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] +0.75%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The first 6 trading days in July have a strong positive historical bias and the S&P 500 did not disappoint those who follow the seasonality charts as we saw gains in 5 of the first 6 days of trading in July giving the S&P a gain near 3% for the month already.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq 100 has actually been up for 10 straight days now. As bullish as 2013 has been, the prior longest streak this year was only 4 days.
The market leading Dow Transportation Index gained 2.3% (although this Transportation ETF shown gained 2.4%) making a higher high over the June high, which is enough to draw a new rising trading channel.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The small caps of the Russell 2000 are now trading at new highs - also creating an "official" rising trading channel. Sometimes breakouts are good short-term contrarian indicators, but this 3rd close above the resistance line makes this breakout more convincing. Eventually pulling back and testing that resistance to see if it acts as support is a typical short-term technical possibility, so of course it would be important for that test to hold to confirm the breakout.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As bearish as I have been recently because of the 1987 comparison and the Hindenburg Omen signals, I have been keeping an eye on sentiment which has been exceptionally bearish considering this year's bullish action. Excessive bearishness is such a bullish indicator that I shouldn't be surprised by the positive returns, but I decided to play it safe instead. That cost me of course, as our sentiment survey system has remained on a buy signal since February 4th, and has gained 15.4% this year. How many of you have been brave enough to stick with this system? Unfortunately, not me.
And we aren't the only bearish investors out there. The Rydex Traders have become extremely bearish. Either sentiment is taking on a whole other meaning, or this is a very nice bullish indicator for stocks. Why would stocks go higher? I don't know, but that's what extreme bearish sentiment like this would indicate.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Only one other time in this century (since 200) have these Rydex investors been more bearish, yet the Dow is within about 100-points of an all-time high, and many major indices are at or close to all-time highs. The Nasdaq is an exception as it is way below it's tech bubble highs of 2000.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The last reading this low (this bearish) was at the 2011 market low.
Bonds are backing and filling an open gap, but it looks like another possible bear flag that may mean more new lows.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
With the 1987 crash comparison behind me, I am trying to get myself to think more bullishly, but with stocks up so sharply in the last couple of weeks, there's no way I can be a buyer here. Hopefully, waiting for a better buying opportunity won't mean missing too much more upside. But now I'm getting worried. If I'm getting more bullish, does that mean it's time for a real 10% correction? We'll have to see how our sentiment survey turns out this week to see how many others are coming to the bullish side (too many would of course be bearish.)
Thanks for reading! We'll see you back 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 rallied yet again yesterday as the Dow picked up another 76-points and all of the major indices saw solid gains with the market leading Dow Transportation index jumping 2.3%.
[TABLE="width: 88%, align: center"]
[TR]
[TD="width: 305"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 160"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0057%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] +0.16%[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] +0.72%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] +0.91%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] +0.75%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The first 6 trading days in July have a strong positive historical bias and the S&P 500 did not disappoint those who follow the seasonality charts as we saw gains in 5 of the first 6 days of trading in July giving the S&P a gain near 3% for the month already.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq 100 has actually been up for 10 straight days now. As bullish as 2013 has been, the prior longest streak this year was only 4 days.
The market leading Dow Transportation Index gained 2.3% (although this Transportation ETF shown gained 2.4%) making a higher high over the June high, which is enough to draw a new rising trading channel.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The small caps of the Russell 2000 are now trading at new highs - also creating an "official" rising trading channel. Sometimes breakouts are good short-term contrarian indicators, but this 3rd close above the resistance line makes this breakout more convincing. Eventually pulling back and testing that resistance to see if it acts as support is a typical short-term technical possibility, so of course it would be important for that test to hold to confirm the breakout.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As bearish as I have been recently because of the 1987 comparison and the Hindenburg Omen signals, I have been keeping an eye on sentiment which has been exceptionally bearish considering this year's bullish action. Excessive bearishness is such a bullish indicator that I shouldn't be surprised by the positive returns, but I decided to play it safe instead. That cost me of course, as our sentiment survey system has remained on a buy signal since February 4th, and has gained 15.4% this year. How many of you have been brave enough to stick with this system? Unfortunately, not me.
And we aren't the only bearish investors out there. The Rydex Traders have become extremely bearish. Either sentiment is taking on a whole other meaning, or this is a very nice bullish indicator for stocks. Why would stocks go higher? I don't know, but that's what extreme bearish sentiment like this would indicate.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Only one other time in this century (since 200) have these Rydex investors been more bearish, yet the Dow is within about 100-points of an all-time high, and many major indices are at or close to all-time highs. The Nasdaq is an exception as it is way below it's tech bubble highs of 2000.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The last reading this low (this bearish) was at the 2011 market low.
Bonds are backing and filling an open gap, but it looks like another possible bear flag that may mean more new lows.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
With the 1987 crash comparison behind me, I am trying to get myself to think more bullishly, but with stocks up so sharply in the last couple of weeks, there's no way I can be a buyer here. Hopefully, waiting for a better buying opportunity won't mean missing too much more upside. But now I'm getting worried. If I'm getting more bullish, does that mean it's time for a real 10% correction? We'll have to see how our sentiment survey turns out this week to see how many others are coming to the bullish side (too many would of course be bearish.)
Thanks for reading! We'll see you back 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.
