The Dow closed up 187-points and after the close, we saw a couple more positive tech earnings reports.

                                  
For the TSP, the C-fund gained 1.36% yesterday, the S-fund made 1.78%, the I-fund jumped 2.66% as the dollar plummeted, and the F-fund (bonds) lost 0.14%.

The big jump in the futures after Intel released their earnings late Tuesday carried over into Wednesday and held.  We talked about the tendency for the market give up those Intel generated gains over the following couple of weeks, but there were no signs of that yesterday. 

If anything, the inverse head and shoulders pattern has come closer to forming the right shoulder of the H&S and if / when that does breakout, we could have a target near 1425.  Just as an FYI, sometimes the H&S pattern (or inverse H&S) does pullback after hitting the neckline, and tests the middle of the head before breaking out.

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

You can see the open gaps on the S&P 500 above, and the Nasdaq below.  The Nasdaq gets them all the time, but a gap on the S&P 500 is rare.  Gaps have a great tendency to get filled, usually sooner rather than later.  All of the other open gaps on the Nasdaq have been filled, although the gap created by the sell-off in February is still partially open. 

The gap created during yesterday's open is about 7-points on S&P 500.  On the Nasdaq it is closer to 40-points!  That's a biggie.

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

The Dow Transports closed higher, but did not have quite as good of a day as the other indices.  At one point it was down on the day.  The problem?  Some railroad stocks were down on the day, but oil hit $111 yesterday.  It is still above its major EMA's so I don't see any real problems here.

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

The reason oil, gold, and silver did so well yesterday was because the dollar dropped close to 1% on the day.  That of course helps stocks as well, and even more so, the I-fund, which was up 2.66% yesterday.

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

There is not too much to complain about with the S&P 500 chart in a bullish inverse head and shoulders pattern and now trading back above the 20 and 50-day moving averages.  The chart looks great.

It's oil and some of the indicators that have me concerned - maybe not now, but at some point this year.

The VIX is in an interesting situation.  A falling VIX is the sign of a rising market, but at some point it is a sign of complacency.  Yesterday's low in the VIX was the lowest reading since mid-2007.  The last few times we saw readings near 15, the market did pull back so that is a concern.
                         
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

And the smart money is still quite bearish as the OEX put/call ratio remains below (on the chart, higher in number) the 2.0 level. 
                         
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

Taking a longer-term view you can see that this has only happened a couple of times in the last 20+ years, and both times saw major market tops within 6 to 9 months.  So, we could be looking at news highs this year, but we shouldn't get too complacent. 


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

Friday is a market holiday so we have the results of this week's Sentiment Survey ready a day early.   The 1.80 to 1  bulls (54%) to bears 30% ratio is a neutral reading so the system will remain in a 100% S-fund allocation for next week. 

Don't forget - The markets are closed on Friday, and there will be no Interfund Transfers processed by the TSP.  Nor will the share prices be updated.  Because of that, I won't be posting a market commentary again until Monday, but I will post my regular Weekly Wrap-Up.  

Thanks for reading! Have a Happy Easter weekend!