Still rising, but so is bullishness
                         
Once again, stocks rallied out of the gate yesterday, after a couple of positive economic reports were released.  But by the time the Fed policy statement was released at 2:15 PM ET, which was virtually unchanged from the prior statement, we saw some profit taking kick in.  The major indices closed in positive territory, but well off their highs.

                                  
The dollar picked up some strength after the announcement and bond yields also rose giving the bond market more trouble.

For the TSP, the C-fund added 0.09% yesterday, the S-fund slipped 0.10%, the I-fund gained 0.35%, and the F-fund (bonds) dropped 0.64% as those bond yields continue to soar.  

The S&P 500 is still hugging that middle rising trend line, and who knows how long this climb can last?  It actually doesn't look all that extended.  We saw a similar rally in September and that one lasted over two months before pulling back.  This recent rally out of the November consolidation is just two weeks old.  There are a lot of folks getting nervous about it, but there are also those who are apparently getting more bullish.
                                                 
                       Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

I am not actually hearing a lot of bullishness out there, but the sentiment surveys and the dumb money indicators are sure showing it.  The put/call ratios have finally hit those extreme levels we saw just prior to two other sharp corrections this year.  So this could be the difference between the September rally, and the current one. 

                         Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

I think the market leader, Dow Transportation Index, could give us some clues in the next day or two.  It has pulled back some over the last two days, but the strong uptrend between lines A and C is still very much intact. 

When the index broke out above line D, a shorter, steeper, uptrend may have been created (line B), and yesterday's low tested that area.  If that line gets taken out this week, line D and/or C will likely get tested next.  If the index bounces off of line B, I'd expect the S&P to continue higher as well.
                        
                       Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

The dollar was very week in the morning yesterday, but after the Fed announcement it found some strength and managed to close above the 50-day EMA again, after breaking below it again earlier in the day. 
                                
                       Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk      

I think the lower low that was put in yesterday morning, may allow us the liberty to draw a new descending trading channel.  That will give us more evidence if this is a new downtrend in the dollar, or just a pullback.  If the dollar is able to breakout above that upper blue line, we could have our answer, but there is also the 200-day EMA lurking just above it, and it is now moving downward - a bearish sign for the dollar.

It's too bad this market is now getting that overly bullish sentiment pressure just before the strong holiday seasonality kicks in.  I am torn between wanting to avoid a pullback, and staying in for the holiday strength.  Having already used my 2 IFT's this month, my only options are to stay in or sell.  There will be no buying back in once I sell, until after the New Year.  

I will take it day by day.  I really want to stay in the market, but I will flee should we start seeing those trend lines break.  There is always the option of only selling a portion of my stock funds; putting some in the G-fund and leaving some in stocks. 

Thanks for reading!  We'll see you back here tomorrow.