Stocks sold off again yesterday sending the C and S TSP funds down 2.8% and 4.6% respectively. The I-fund managed a 0.4% gain on weakness in the dollar, and some positive fair valuation payback.
The
S&P 500 has now filled the gap at 879, which we suspected was coming. Now it is coming down toward the recent uptrend support line, which if broken, could lead to a move back down to at least 815. Unless something happens between now (Thursday about 12:30 AM ET) and the market opening on Friday morning, that break of support seems likely.
Chart provided courtesy of www.decisionpoint.com
The reason being because the S&P 500 futures are down a whopping 40-points as I write this and have already broken down below support, on the news that the auto bailout has failed in the Senate.
Everyone has been waiting on a Santa Claus rally and the move from the 741 low up to the 918 high was a very impressive 24% rally. We have talked many times about the explosive rallies that can come in the middle of a bear market and 24% is about right. We saw a few similar moves during the 2000-2002 bear market.
Perhaps the strong holiday seasonality can keep things afloat, but we are in a severe bear market in an economic environment - the likes of which we have not seen in many years, and the market became overbought. I don't see any reason to be optimistic.
If this sell-off takes us down to a test of the prior lows and can hold, and the market becomes oversold - I might be more willing to take some chances. But not here at 873.
The "S&P 500" may just end up being the S&P 550 or 600, before this is all over.
The dollar sold off 2% yesterday and we had a break of a head and shoulders pattern (which is bearish). The formation gives us an initial downside target of just above 80. That would coincide with the rising 200-day moving average so that seems like a reasonable area for it to find support.
Chart provided courtesy of www.decisionpoint.com
The weakness in the dollar had its usual inverse affect on commodities, including oil, which was up almost 15% yesterday. It closed above its 20-day moving average for the first time since September.
Chart provided courtesy of www.decisionpoint.com
The PMO indicator gave us a crossover buy signal for oil, but it is way too early to call this a bottom. First let's see if it can make it to the upper end of its trading channel, which happens to be very close to the 50-day moving average at $60. For now, it's just a bounce. The intermediate-term tests will come in the weeks ahead.
I had accidentally sent out Thursday's Sentiment Survey email with last week's survey dates. I had to make a correction and resend it. Sorry for the inconvenience. I will post the results a little later today. Judging by the S&P 500 futures, I'm guessing there will be a lot of bears this week.
Fasten your seatbelts. It looks like today is going to get a little wild. With the futures down so steeply, we are bound to see some large swings today as the bulls buy the dips and the bears sell the rips. Where she stops, nobody knows.
That's all for today. Thanks for reading. Have a great weekend!
The
S&P 500 has now filled the gap at 879, which we suspected was coming. Now it is coming down toward the recent uptrend support line, which if broken, could lead to a move back down to at least 815. Unless something happens between now (Thursday about 12:30 AM ET) and the market opening on Friday morning, that break of support seems likely.
Chart provided courtesy of www.decisionpoint.com
The reason being because the S&P 500 futures are down a whopping 40-points as I write this and have already broken down below support, on the news that the auto bailout has failed in the Senate.
Everyone has been waiting on a Santa Claus rally and the move from the 741 low up to the 918 high was a very impressive 24% rally. We have talked many times about the explosive rallies that can come in the middle of a bear market and 24% is about right. We saw a few similar moves during the 2000-2002 bear market.
Perhaps the strong holiday seasonality can keep things afloat, but we are in a severe bear market in an economic environment - the likes of which we have not seen in many years, and the market became overbought. I don't see any reason to be optimistic.
If this sell-off takes us down to a test of the prior lows and can hold, and the market becomes oversold - I might be more willing to take some chances. But not here at 873.
The "S&P 500" may just end up being the S&P 550 or 600, before this is all over.
The dollar sold off 2% yesterday and we had a break of a head and shoulders pattern (which is bearish). The formation gives us an initial downside target of just above 80. That would coincide with the rising 200-day moving average so that seems like a reasonable area for it to find support.
Chart provided courtesy of www.decisionpoint.com
The weakness in the dollar had its usual inverse affect on commodities, including oil, which was up almost 15% yesterday. It closed above its 20-day moving average for the first time since September.
Chart provided courtesy of www.decisionpoint.com
The PMO indicator gave us a crossover buy signal for oil, but it is way too early to call this a bottom. First let's see if it can make it to the upper end of its trading channel, which happens to be very close to the 50-day moving average at $60. For now, it's just a bounce. The intermediate-term tests will come in the weeks ahead.
I had accidentally sent out Thursday's Sentiment Survey email with last week's survey dates. I had to make a correction and resend it. Sorry for the inconvenience. I will post the results a little later today. Judging by the S&P 500 futures, I'm guessing there will be a lot of bears this week.
Fasten your seatbelts. It looks like today is going to get a little wild. With the futures down so steeply, we are bound to see some large swings today as the bulls buy the dips and the bears sell the rips. Where she stops, nobody knows.
That's all for today. Thanks for reading. Have a great weekend!
