8/07/12
Stocks followed through yesterday, on Friday's big 200+ point rally in the Dow, with a modest gain - the first positive Monday for the Dow in 10 weeks. But the close was less than exciting as we saw some profit taking and possibly a reversal day.
[TABLE="align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"] Daily TSP Funds Return
[TABLE="align: center"]
[TR]
[TD="align: right"] G-Fund:
[/TD]
[TD] +0.01%
[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:
[/TD]
[TD] +0.12%
[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:
[/TD]
[TD] +0.23%
[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:
[/TD]
[TD] +0.62%
[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:
[/TD]
[TD] +0.61%
[/TD]
[/TR]
[TR]
[TD="colspan: 2, align: right"]
[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 hit the double resistance lines and could not get any further. It was a positive day but the second low volume has been quite low which tells us that the big money may not be getting involved in the rally.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
A closer look shows that yesterday's weak close may have been enough to produce a reversal day. It's not much of a tail, but prior reversal days during this recent uptrend didn't have huge "tails" either.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The market leading Dow Transportation Index actually closed down yesterday, and the tail that it madel is a reversal day since it closed near the lows. Not a great sign for the market.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar was down yesterday and in the process filled the open gap we have been watching.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
But the dollar found support and reversed higher closing off of the lows. This is typical of what we have been seeing for the last several months and years: The dollar and stocks move inverse to each other so if the dollar finds support here, after filling the open gap, the chances of a pullback in stocks is more likely.
The market loves to surprise us and I think the surprise here would be a move up and a breakout for the S&P 500. The technical analysis would suggest otherwise and I am assuming we will see a move the the bottom of the trading channel on the S&P 500, but never underestimate the market's ability to make us look foolish whenever possible.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.html
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 followed through yesterday, on Friday's big 200+ point rally in the Dow, with a modest gain - the first positive Monday for the Dow in 10 weeks. But the close was less than exciting as we saw some profit taking and possibly a reversal day.
[TABLE="align: center"]
[TR]
[TD]
[TD="align: center"] Daily TSP Funds Return
[TABLE="align: center"]
[TR]
[TD="align: right"] G-Fund:
[/TD]
[TD] +0.01%
[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:
[/TD]
[TD] +0.12%
[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:
[/TD]
[TD] +0.23%
[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:
[/TD]
[TD] +0.62%
[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:
[/TD]
[TD] +0.61%
[/TD]
[/TR]
[TR]
[TD="colspan: 2, align: right"]
[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The S&P 500 hit the double resistance lines and could not get any further. It was a positive day but the second low volume has been quite low which tells us that the big money may not be getting involved in the rally.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
A closer look shows that yesterday's weak close may have been enough to produce a reversal day. It's not much of a tail, but prior reversal days during this recent uptrend didn't have huge "tails" either.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The market leading Dow Transportation Index actually closed down yesterday, and the tail that it madel is a reversal day since it closed near the lows. Not a great sign for the market.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The dollar was down yesterday and in the process filled the open gap we have been watching.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
But the dollar found support and reversed higher closing off of the lows. This is typical of what we have been seeing for the last several months and years: The dollar and stocks move inverse to each other so if the dollar finds support here, after filling the open gap, the chances of a pullback in stocks is more likely.
The market loves to surprise us and I think the surprise here would be a move up and a breakout for the S&P 500. The technical analysis would suggest otherwise and I am assuming we will see a move the the bottom of the trading channel on the S&P 500, but never underestimate the market's ability to make us look foolish whenever possible.
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at www.tsptalk.com/comments.html
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.
