Today's Comments (Short Term Outlook)                             Printer friendly

Outside day threw us a curve A strong morning rally went very wrong by the close.  The early 80-point gain in the Dow could not hold and a 250-point decline in the last 90 minutes gave us a touch of the panic we have been waiting for.            The morning's high was higher than Monday's high, which is a good sign, but the late sell-off took out Monday's low making yesterday an "outside day".  Outside days can indicate a reversal is near but in yesterday's case, it did not fit the definition.  If the outside day closed near the high of the day, rather than near the low as it did, it could be a bullish side. So, I don't see anything technically positive in this one.                                      Chart provided courtesy of www.decisionpoint.com  Patience will pay off here but those rolling the dice may catch a nice snap-back rally.  As I have been mentioning, the odds are favoring a short-term rebound but trying to predict it can be dangerous. Looking at a longer-term chart of the S&P 500, you can see that the nearly 5-year bullish trend has been broken this week.  Quite a rough way to start a new year.                                     Chart provided courtesy of www.decisionpoint.com  The story remains the same.  We are now in a downtrend and an intermediate-term buy signal could be days to months away.  We just won't know until the chart paints a better picture. The blatant break of the long-term trend line gives us a possible initial target for any relief rally in the S&P 500 - approximately 1425.                            That's all for today.   See you tomorrow.   Have questions?  Visit our message board for answers.  Would you like to be on our email alert list?  We will send you an email when there is a change to our asset allocation or market outlook.  Your email address will never be given out.  Read our privacy policy.  By signing up you agree to the TSP Talk Terms of Service.  More details below **. Are you bullish or bearish?  Join the Weekly Sentiment Survey. Like what you're reading?  Tell a Friend about us.