05/28/13
Stocks opened sharply lower on Friday with Dow down nearly 100-points in early trading, but once again buyers stepped up, and by the close the Dow was back in positive territory at +8.60.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[/TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 155"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0035%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]+0.01%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]-0.05%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]-0.20%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]-0.01%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
As I mentioned is this past weekend's Weekly Wrap Up, we often we see reversals of the larger trend prior to a holiday, only to see that larger trend resume after the holiday. We are clearly in an uptrend, but the market peaked on Wednesday setting up the pre-holiday negative reversal.
Now that the holiday is over, will the uptrend resume?
While a positive Tuesday would go against the trend this Memorial Day seasonal chart below, it would go along with the holiday reversal theory mentioned above and, as we have mentioned last week, there have been 19 consecutive positive Tuesdays. That's a tough trend to fight.
Chart provided courtesy of www.sentimentrader.com
S&P 500 pulled back late last week, after peaking on Wednesday and creating a high volume, negative outside reversal day. Normally a bearish formation and an indication of a potential peak, so we'll be watching the old support lines, which broke last week, to see if they now act as resistance. This might tell us where this bull market stands. The 20-day EMA is just below current levels and has hold as support on both Thursday and Friday.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Small caps are in a similar situation with a small bear flag forming, but we have seen this before where these bear flags, normally bearish, turn into bottoms for the short-term pullbacks.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Despite the sentiment surveys that tell us that investors are still quite bears - especially after Wednesday's negative reversal, we've seen some signs from Rydex traders that investors are actually acting very bullish again, which is usually bearish. One of these days these two indicators will agree with each other and we may get a more significant pullback, but until then let's keep an eye on the charts for clues.
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 opened sharply lower on Friday with Dow down nearly 100-points in early trading, but once again buyers stepped up, and by the close the Dow was back in positive territory at +8.60.
[TABLE="width: 88%, align: center"]
[TR]
[TD]
[TD="align: center"]Daily TSP Funds Return[TABLE="width: 155"]
[TR]
[TD]G-Fund:[/TD]
[TD="align: right"]+0.0035%[/TD]
[/TR]
[TR]
[TD]F-fund:[/TD]
[TD="align: right"]+0.01%[/TD]
[/TR]
[TR]
[TD]C-fund:[/TD]
[TD="align: right"]-0.05%[/TD]
[/TR]
[TR]
[TD]S-fund:[/TD]
[TD="align: right"]-0.20%[/TD]
[/TR]
[TR]
[TD]I-fund:[/TD]
[TD="align: right"]-0.01%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"]More returns[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
As I mentioned is this past weekend's Weekly Wrap Up, we often we see reversals of the larger trend prior to a holiday, only to see that larger trend resume after the holiday. We are clearly in an uptrend, but the market peaked on Wednesday setting up the pre-holiday negative reversal.
Now that the holiday is over, will the uptrend resume?
While a positive Tuesday would go against the trend this Memorial Day seasonal chart below, it would go along with the holiday reversal theory mentioned above and, as we have mentioned last week, there have been 19 consecutive positive Tuesdays. That's a tough trend to fight.
Chart provided courtesy of www.sentimentrader.com
S&P 500 pulled back late last week, after peaking on Wednesday and creating a high volume, negative outside reversal day. Normally a bearish formation and an indication of a potential peak, so we'll be watching the old support lines, which broke last week, to see if they now act as resistance. This might tell us where this bull market stands. The 20-day EMA is just below current levels and has hold as support on both Thursday and Friday.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Small caps are in a similar situation with a small bear flag forming, but we have seen this before where these bear flags, normally bearish, turn into bottoms for the short-term pullbacks.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Despite the sentiment surveys that tell us that investors are still quite bears - especially after Wednesday's negative reversal, we've seen some signs from Rydex traders that investors are actually acting very bullish again, which is usually bearish. One of these days these two indicators will agree with each other and we may get a more significant pullback, but until then let's keep an eye on the charts for clues.
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.
