Market Comments

 November 2, 2010

Current TSP Share Prices
Today's Commentary                                               
Election Day and FOMC
Stocks opened up strongly on Monday, something we have become used to lately, and like last Monday, those gains were mostly gone by the close.  The Dow was up 125-points at one point, and down nearly 60 at another, before closing up 6-points.
 
                                 
For the TSP, the C-fund added 0.10% on Monday, the S-fund fell .020%, and the I-fund added 0.05%.  The F-fund (bonds) ticked up 0.01%. 

So it was another flat day as investors seem reluctant to commit to anything before the election and this week's FOMC meeting.  By Wednesday the uncertainty should be over, and we also have the jobs report on Friday so I suspect this three week flat line trading will find a direction.

There is virtually no change in the charts.  The S&P 500 has been closing near the 1180-1185 area for nearly 3-weeks.  The short-term support and 20-day EMA held, but the overhead resistance is also holding.  It sure looks like it wants to roll over, but with the index still above those important levels, it may be premature to call for a top.  Some like to say it is better to sell when you can, rather than when you have to. 
        
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

Some indicators are showing concern with the PMO sell signal and negative divergence in the MACD Histogram above, but as I mentioned yesterday, many indicators are surprisingly sitting in neutral territory after the recent double digit return.

If the dollar is going to continue to move the market, the longer-term support line has so far held during this correction, and if it starts to rally back up to the top of the range, stocks will likely suffer.  If support breaks down, look for the rally in stocks to resume - as least while this inverse correlation continues.
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

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Thanks for reading!  We'll see you tomorrow.

Tom Crowley   
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