Bull or bear?
Stocks dropped on Friday, as the TSP stock funds lost 2% to 3% on the day,
but ended the week up sharply, and after a slow start, March has returned
much of 2009's early losses. Can it continue week?
A week ago Friday I had said that I wouldn't want to be in stock market next week
(which was last week) and the market, being its usual humbling self, had a
great week. I'd say it again for this week but I'm afraid I'll become
the boy who cried wolf because there is a case for the market making a
continued move higher, but
the path of least resistance appears to be down now.
Chart
provided courtesy of
www.decisionpoint.com,
analysis by TSP Talk
The two indices that can be considered market leaders are the Dow
Transports, and the Nasdaq. The Transports have not rallied up to
their declining resistance line like the S&P 500, but rather has rallied up
to its prior lows, which could now act as resistance.
Chart
provided courtesy of
www.decisionpoint.com,
analysis by TSP Talk
The Nasdaq is doing much better as
it not only held the November lows (close enough), but it has now broken
above the downtrend resistance line. 1600 has given it some trouble in
the past, and that may be the test area.
Chart
provided courtesy of
www.decisionpoint.com,
analysis by TSP Talk
So, with the two leading indices
above telling different stories, we'll either see the transports have a nice
rally, or the Nasdaq is about to start heading down. I don't think
they will head in different directions for any length of time, if at all.
The Smart Money / Dumb Money Confidence indicator is once again showing an
equal reading from each side. The smart money confidence is heading
down however, while the dumb money pushes higher.
I drew a line at across the 54 level, and we can see other instances where the two crossed (dumb money going up,
smart money coming down) and while there were short-term tops nearby, none
of them occurred exactly at the crossing point - for whatever that is worth.
Chart provided courtesy of
www.sentimentrader.com
Our TSP Talk Sentiment Survey system
is on a sell signal for this week, after the 47% bulls, 37% bears reading.
Any time that ratio (1.27 to 1) goes over 1.00 to 1 during a bear market, we
get a sell signal. It has picked up 11.3% in March so far, and with
this sell signal it gave Friday, the system has locked in those gains for at
least the next week.
Administrative Note: Starting today we will be offering a new
premium service called The TSP & Economic Report. Access to the
service will be available free of charge during the month of April.
The author, Ken Bateman (or "Scribbler") joined our message board at the end
of 2008 and asked if he could start a
blog. It was obvious that Scribbler had knack for not only
writing, but also economics; something that has been missing from TSP Talk.
Ken is a graduate of the United States Military Academy at West Point, with
a Bachelors of Science in Economics and a Master's of Business
Administration from Troy University. He also happens to be leading our
2009 AutoTracker
returns contest
with a +15% return through Friday, March 27.
The first twice weekly newsletter will be available this morning. It
will be free for the month of April, but to gain access you will need to set
up a
premium service login (also
free) if you don't already have one, as you will have to login to gain
access. Click here
for more information.
That's all for today.
Thanks for reading.
See you tomorrow!
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