2014 came in like a lion (or maybe a bear) as the Dow lost 135-points. It was the first loss on the first trading day of the year since 2008. The losses seemed steep and sentiment did get more bearish, but in reality it was less than a 1% loss after a year that saw gains over 30%. Nothing to be overly concerned about yet.
[TABLE="width: 80%, align: center"]
[TR]
[TD="width: 300"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 180"]
[TR]
[TD="width: 83, align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0126%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] F-fund:[/TD]
[TD="align: right"] +0.11%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] C-fund:[/TD]
[TD="align: right"] -0.87%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] S-fund:[/TD]
[TD="align: right"] -0.96%[/TD]
[/TR]
[TR]
[TD="width: 83, align: right"] I-fund:[/TD]
[TD="align: right"] -1.09%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 69%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The problem is the January Indicator, which we have discusses a few times... As goes January, so goes the year, and the first week few days in January can be the clue. What we were stressing however was those negative Januarys. There were 9 negative Januaries from 1990 to 2013 and 4 of the 9 years ended in negative territory. Moreover, there were only 6 years from 1990 to 2013 that ended with negative returns, and 4 of the 6 started with negative Januarys.
The good news for the bulls is that today (Friday) is trading day #2 in January, and it has a great historical record, so perhaps a little snap back action? If it doesn't rebound however, then we may start think a weak January is coming, and as goes January...
Chart provided courtesy of www.sentimentrader.com
The S&P 500 (SPY) is possibly at some support here (red), but it's not all that strong.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The small caps may have also found some obscure support but it looks like the resistance at top of that trading channel (black) was stronger than the small bull flag that was created after Christmas.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Bonds rebounded some but they still remain below some key resistance levels.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Since I mentioned it on Thursday, I wanted to follow up on the gold analysis. The GLD gold ETF broke above its descending trading channel (black) although it did create a very small open gap in the process, that may get filled quickly. The big open gap is way up at 125 so should the gold traders drag it up there to fill that gap, we might have a decent bullish trade.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
That's all for today. I'm a little burned out after two days of settling up the 2013 AutoTracker returns and its winners, plus getting it ready for 2014, which is never as easy I think it will be. I'm ready for the weekend.
In today's TSP Talk Plus Report we look at the ARMS Index and discuss the Sentiment Survey results. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Thanks for reading! Have a great weekend!
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.
