Market Comments

 December 7, 2010

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Today's Commentary                                               
Still waiting
Stocks opened lower on Monday and moved mostly sideways and in a tight trading range (40-points for the Dow) for the rest of the day.  By the close the Dow lost 20-points, taking a little breather after the nearly 375-point rally in the prior 3-days of trading.
                                    
For the TSP, the C-fund slipped 0.13% on Monday, the S-fund remained strong picking up 0.31%, the I-fund lost 0.36%, while the F-fund (bonds) was up 0.38%.  
The S&P 500 also traded in a tight range yesterday, on relatively light volume  Investors seemed tentative to do much of anything after last week's big rally. 

                        
                       Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
We saw the market leader Dow Transports make a new high last week, and while it was not much, leader #2 - the Nasdaq - peeked its head, and closed at a new high yesterday.

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

We will keep a close eye on the dollar because any further gain in the stock market will likely need some help from a weaker dollar.  Yesterday's modest gains in the dollar could only take it back up to the recent broken trend line.  Support, once broken, tends to act as resistance, and that is what we saw yesterday.  The 50-day EMA held again, but as I predicted yesterday, I believe we will see it break down by the end of the week.
 
                         
                       Charts provided courtesy of www.decisionpoint.com, analysis by TSP Talk

You may have seen the news of a deal being reached on the tax cuts.  I would think that this would be a big positive for stocks but the overnight futures aren't exactly jumping as I write this Monday evening.  Things are rather flat.  Either this action was already priced in the market, or perhaps the futures traders are on hold until after Monday Night Football, which is where I am heading right now.
Thanks for reading!  We'll see you back here tomorrow.

Tom Crowley

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