2/06/13
Stocks recovered much of Monday's losses yesterday, as the slow and steady ascending trend has become a little more volatile. The Dow gained 99-points.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 156"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0043%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]-0.15%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]+1.05%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]+0.86%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]+0.11%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The I-fund lagged because the dollar was up most of the morning while the overseas markets were still trading. By the close the dollar had given up those gains so I expect some fair value being added to today's I-fund share price.
Over the last three days, the S&P 500 has been testing the top and bottom of this year's narrow trading range. This kind of back and forth action could be a consolidation before another move higher, but more likely a prelude to a pullback since volatility is usually associated with falling prices.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
I could be wrong because betting against this market has not been a wise strategy for the last several weeks, but the overhead resistance looks pretty solid so any more upside action could be limited without some kind of pullback or correction first.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Transportation index, which has been extremely strong since November, is also fighting between a pullback from resistance, and finding continued support from the rising trendline.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As much as we are seeing signs of a needed decline, the charts do not look all that bad. The Nasdaq 100, which is the index for the leading technology stocks, has remained in a consolidation since the 2nd trading day of the year. It is rare to see a drop from a consolidation like this, but t happens, and the fact that this market leader has been lagging so badly could be telling us a story different from the more positive story the Transports are telling us.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
This is interesting: Newsletter writers are recommended stocks at a rate not seen since the bull market top in 2000, and other instances where they have recommended an average stock exposure of 70% have led to pullbacks in the past - some quite severe.
Chart provided courtesy of www.sentimentrader.com
sentimenTrader.com: "There have been a total of 9 weeks when the combined level neared 70% (a couple of them were clustered together). A month later, the S&P 500 showed a negative return every time, a median of -3.1%. Its maximum gain during the next month averaged only +0.1% (using weekly closes) while the maximum downside averaged -4.4%.
"Even over the next six months, returns were poor. Only 1 of the 9 weeks had a positive return (+1.9%), and the median was -4.25%. The most that the S&P rallied during the next six months averaged only +0.7%, while its maximum decline averaged -13.8%."
Administrative Note: RevShark is offering a free trial to his TSP Timing Service this week . Click here for some basic info on RevShark's service... or click here for information on how to gain access.
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 recovered much of Monday's losses yesterday, as the slow and steady ascending trend has become a little more volatile. The Dow gained 99-points.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 156"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0043%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]-0.15%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]+1.05%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]+0.86%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]+0.11%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The I-fund lagged because the dollar was up most of the morning while the overseas markets were still trading. By the close the dollar had given up those gains so I expect some fair value being added to today's I-fund share price.
Over the last three days, the S&P 500 has been testing the top and bottom of this year's narrow trading range. This kind of back and forth action could be a consolidation before another move higher, but more likely a prelude to a pullback since volatility is usually associated with falling prices.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
I could be wrong because betting against this market has not been a wise strategy for the last several weeks, but the overhead resistance looks pretty solid so any more upside action could be limited without some kind of pullback or correction first.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Transportation index, which has been extremely strong since November, is also fighting between a pullback from resistance, and finding continued support from the rising trendline.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
As much as we are seeing signs of a needed decline, the charts do not look all that bad. The Nasdaq 100, which is the index for the leading technology stocks, has remained in a consolidation since the 2nd trading day of the year. It is rare to see a drop from a consolidation like this, but t happens, and the fact that this market leader has been lagging so badly could be telling us a story different from the more positive story the Transports are telling us.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
This is interesting: Newsletter writers are recommended stocks at a rate not seen since the bull market top in 2000, and other instances where they have recommended an average stock exposure of 70% have led to pullbacks in the past - some quite severe.
Chart provided courtesy of www.sentimentrader.com
sentimenTrader.com: "There have been a total of 9 weeks when the combined level neared 70% (a couple of them were clustered together). A month later, the S&P 500 showed a negative return every time, a median of -3.1%. Its maximum gain during the next month averaged only +0.1% (using weekly closes) while the maximum downside averaged -4.4%.
"Even over the next six months, returns were poor. Only 1 of the 9 weeks had a positive return (+1.9%), and the median was -4.25%. The most that the S&P rallied during the next six months averaged only +0.7%, while its maximum decline averaged -13.8%."
Administrative Note: RevShark is offering a free trial to his TSP Timing Service this week . Click here for some basic info on RevShark's service... or click here for information on how to gain access.
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.
