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| Today's Commentary (Short Term Outlook) |
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Follow up I am going to make this quick today as I have some relatives in from out of town and we're doing a little entertaining. You may have seen that the Dow lost almost 100-points on the day and the indices shed about 1% across the board. Because of the holiday, Thursday's share prices included that data, plus the activity from Wednesday. I am going to show you three charts today just to follow up on what we talked about on Thursday. I think you will get the gist. 
  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk See yesterday's commentary below for more information... Also, the results of this week's sentiment survey have been posted. Thanks for reading. Have a great weekend! 11/12/09 Double top for S&P? Double bottom for dollar? The major indices were up modestly yesterday but because of the Federal holiday, we did not get updated TSP share prices. Today's closing prices will include the action of both yesterday's and today's market activity. Surprise, surprise; the S&P 500 put in a new 52-week high yesterday before pulling back a little but the strength of this market continues to surprise the bears, and maybe even the bulls. So many of us have been anticipating some kind of correction but once again the last pullback was did not hit the 10% definition of a correction, and it turned out to be at least a short-term buying opportunity. The exponential moving averages (EMA's) are all back in line, moving higher with the 20 above the 50, and the 50 above the 200. The PMO indicator just put in anther crossover buy signal.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk If there are negatives, it would be that we are seeing a steady decrease in volume during this leg up, and the S&P 500 has the makings of a double top, which could trigger a pullback. This all but eliminates the head and shoulders pattern we were talking about, but like the Dow Transports last month, this double top could turn out to be a rally stopper. Only time will tell.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk On the bright side, the housing index broke its recent downtrend and could easily move up to the next areas of resistance. That would be the top of the right shoulder (RS) of its head and shoulders pattern, and then the middle of the head, which is sometimes the target of a head and shoulders rebound, before moving back down to the neckline.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The NYSE hasn't really moved up during the last couple of days, keeping it near the +500 area. We have talked bout this a few times lately, but just to recap, the +500 area was a resistance area for stocks during the bear market of 2007-2008, but once the market bottomed in March, it was able to move to +1000 overbought level.  Charts provided courtesy of www.decisionpoint.com, analysis by TSP Talk The last peak in October only made it to +500, and here it is again. Can this rally continue despite the +500 overbought reading? The dollar fell to a new 52-week low yesterday, but managed to rally late and close back above that prior low. It will be interesting to see if the dollar can hold here.  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk If you are in stocks right now you probably want the downside in the dollar to continue because I suspect a rally in the dollar will coincide with the next move lower for stocks. Notice the pretty close inverse correlation between the dollar above, and this chart of the S&P 500...  |