Today's Comments (Short Term Outlook)                             Printer friendly

More of the same It seems the market is in a pattern of strong opens, followed by weak closes - and weak opens that turn into strong closes.  Yesterday we got the latter. We did indeed get a breakout of the pennant formation's apex yesterday, and it was to the downside as I assumed, but like a frightened turtle the S&P 500 pulled its head back into the shell of the pennant by the close.  We're back to square one.                                     Chart provided courtesy of www.decisionpoint.com  While the market does seem to be withstanding some significant negative influences, we can't ignore oil closing above $100 a barrel for the first time, gold at $945 an ounce, and the ongoing saga of the credit crisis.  We can add more concern over inflation as yesterday's CPI came in higher than expected.  The Fed has their hands full trying to cut rates to keep the economy from sinking further and at the same time controlling inflation.  Not an easy task.  The market sold off on the news but as we saw, rallied later in the day after the release of the FOMC meeting minutes. I'm going to cut this short today, but I'll leave you with a quote from Jason from SentimenTrader.com as he tries to make sense of the unusual action we are seeing:   "To say we've seen some whipsaws lately is quite an understatement.  Yesterday we got a gap up opening of greater than +1%, only to see the market turn negative on the day before a last-minute spike at the close.  Now today we got a 1% gap down open, and what looks to be a positive close.   "I cannot find another instance of this happening at any point in the past 15 years using the S&P 500 tracking fund SPY, or the past 25 years using the S&P 500 futures.  If we relax the parameters a bit and look for gaps of 0.75% or more, then only one precedent pops up.  That was May 27th, 1998, which led to another month of back-and-forth trading and no real progress either way.    Like we saw with the huge gaps and reversals on January 22nd and 23rd, we're in mostly unprecedented territory with some of these price movements."   -- Jason Goepfert www.sentimentrader.com That's all for today.  See you back here 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.