Today's Comments (Short Term Outlook)                             Printer friendly

Googled! Google's big earnings report on Thursday sent stocks flying again on Friday.  I can understand why Google moved up 20%, but the fact that the rest of the market tagged along was a surprise to me. It could be that the news hasn't been all that positive over the past several months, so when it is positive, the bulls are jumping all over it.  But emotional buying can lead to disappointment.  There is a little wiggle room to the upside for the S&P 500, but after that we get some major resistance near 1410 to 1415.                              Chart provided courtesy of www.decisionpoint.com I have mentioned "gaps" before here, and how gaps in the charts tend to get filled; usually sooner rather than later, although sometimes it can take several months.  Last week produced two big gaps in the chart of the Nasdaq (I use the Nasdaq because gaps are more pronounced because of the electronic trading.)  Looking at the chart prior to last week, all of the major gaps have been filled, except for one that opened during the first week of this year.  That one will eventually be filled but it could take longer than a typical gap.                               Chart provided courtesy of www.decisionpoint.com That could be the case with last week's gaps, but I'm not counting on it.  The S&P is coming up against overhead resistance as I show in the top chart, we are in a post options expiration week, which tends to give back some of options expiration week gains, and the market is now overbought. It is not extreme yet but it is the most overbought the NYSE has been since early February.                              Chart provided courtesy of www.decisionpoint.com I am mentally preparing myself for the possibility that we have seen a bottom and a new bull market is beginning.  But because of the current situation, if we are not entering a new bull market, then we are at the top of a bear market rally, and that is not a time to be bullish.  I am staying cautious but will keep an open mind to the bullish possibilities. Did anyone go see Ben Stein's movie "Expelled" this weekend?  Basically it is a discussion of the origins of life.  If you do go see it, when they discuss the arguments of each side of the evolution / intelligent design debate, substitute buy and hold investment strategy versus the active trading strategy when they talk about the life argument.  The wall analogy between the two sides is interesting and the fact that one side refuses to consider the other as a viable possibility, in fact gets them into a little trouble for even considering it, brought to mind the attitude of the old fashion buy and hold investors toward the new internet age / instant information, traders.  We all need to have an open mind.  One doesn't have to be wrong for the other to be right. That's all for today.  Thanks for reading.  Thanks for reading! 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. ------------------------------------------------------------------------------------------------------------------- ** By joining our email alert list you will receive an email each time we initiate a transfer or change our market outlook.  You may also receive an email each Monday morning reminding you that our comments are updated daily.  We will always send out these emails prior to making the transfer myself but we can not guarantee you will receive it in time to make a transfer yourself.  By joining you understand that this is what the owners of TSP Talk are doing in their own account and if you decide to follow our transfers in your own account, you do so at your own risk.  There is always a possibility for a loss in your account.  These transfers could come very often and you may have to act quickly to make the deadline.  Please consider your investment strategy before taking any advice or making any transactions.  By reading the contents of TSP Talk.com and accepting the email alerts, you must agree to the Terms of Service.  Thank you. TSP Talk