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| Today's Commentary |
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Sellers jump on
the rally The market got off to a great start yesterday, but I am always leery of gap up openings on a Monday morning. The early triple digit gain in the Dow nearly disappeared but it did hang onto modest gains as the Dow closed up 31.  For the TSP, all of the funds closed higher on Monday as the C-fund was up 0.22%, the S-fund gained 0.58%, and the I-fund rallied 0.82%. The F-fund (bonds) added 0.04%. The S&P 500 created what looks like a negative reversal day, but the strong start yesterday did leave an open gap near 1184. It's only about 1-point but open gaps are rare on the S&P 500 chart so I would not be surprised to see that gap get filled some time today. If the gap is closed at 1184, that could act as a support area. If not, there is decent support at 1175 (rising trend), then 1165 (20-day EMA).  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Yesterday's close left the S&P right in the middle of what looks like the new parallel trading channel. It is a rising target but right now the outer limits of the range are about 1173 to 1205. The best news for the S&P 500 is the fact that both of the market leaders, the Dow Transportation Index and the Nasdaq, are still making new 52-week highs.   Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk A quick update on the sentiment indicator I discussed yesterday: I had said, "If there is one sentiment indicator that concerns me it is the Smart Money / Dumb Money Confidence Indicator from SentimenTrader.com.  "When one of these indicators hits 60 while the other is below 40, you have yourself a signal. In this case the smart money is below 40 so if the dumb money climbs to 60 or more, it would be a sell signal. A continued rally into the elections might just push that dumb money confidence over 60." While I was expecting the dumb money confidence to go from 58 to over 60 if the market continued to go higher, the smart money actually moved back over 40 and is now 42.  Chart provided courtesy of www.sentimentrader.com Not a big deal but now both the dumb and the smart confidence numbers are in neutral territory, moving the indicator further away from a sell signal, rather than closer. Just an observation, but it surprised me. Thanks for reading! We'll see you back here tomorrow. Tom Crowley |
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