The Dow shot up over 100-points yesterday but there still seems to be a cloud of nervousness in the air.  That can be a good thing, but the market is so skittish lately, that any sign of negative news could put stocks in a world of hurt very quickly.

Yesterday's rally was partially sparked by Apple's great earnings report, and the rest of the tech world jumped on board.  But after the close yesterday, Amazon delivered a lackluster quarterly report and the market futures quickly turned south.  As I talked about yesterday, you want to sell the strength and buy the weakness if possible.  That's a little tough to do in our TSP accounts because of the deadline and delay in processing. 

The S&P 500 has put in another possible kangaroo tail bottom, but if the indices drop down today near Monday's lows, that will disappear.  Keep an on on yesterday's low.  If it holds, that another positive sign.


                                   Chart provided courtesy of www.decisionpoint.com

The 10-day moving average of the ARMS index is down to the 1.30 area again.  1.30 used to be a nice intermediate-term buy signal but we have been seeing more moves down toward the 1.50 level.  This indicator is not great for short-term buy signals, but it tells us that we may want to buy weakness for a longer-term hold if that's your style.

You can see that 1.30 has come near some very nice bottoms over the last three years.

                                   Chart provided courtesy of www.decisionpoint.com

The S&P has some resistance up above, and that kangaroo tail "could act" as support below.  The NYSE is still on the oversold side and the sentiment surveys have turned much more bearish.  These are good signs for stocks, and a good reason why we rallied yesterday, but if these turn neutral again, can the market stay afloat?  With volatility in high gear and the Fed meeting on tap next week, I think I will take it day by day rather than making any bold predictions.

That's all for today.  See you tomorrow.
 

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