Market Comments April 22, 2009 For those wondering where TSP Share Prices went, they are still posted on the home page and there is a link in the "Quick Link to" table above.

Today's Comments (Short Term Outlook)                            Printer  friendly

Which day was right? Stocks rebounded from Monday's large sell-off, getting back nearly half of the losses.  Sellers were in control on Monday, buy buyers stepped in.  Who is right?  After falling below the 20-day moving average in early trading, the S&P 500 rebounded sharply Tuesday after Geithner's testimony, and the index closed 20-points above it.  There was actually a very small gap in the S&P chart near 828, and it was filled with yesterday's early selling.  So where does this leave us?  A little confused, but there are some clues. Let's take a look at the MACD Histogram indicator below.  This is a good indicator to use during a trending market.  If you remember we've talked before about the MACD not making a lower during the January to March decline.  This was a bullish divergence and a sign of internal strength.                    Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Now we are seeing that the MACD indicator has been steadily moving lower for about 4-weeks, while the S&P 500 has been moving higher.  This is a bearish divergence and a sign of internal weakness. This is a pretty good indicator in this market environment and something to consider. The NYSE overbought/oversold indicator, which actually works best in an oscillating or range bound market, has been on the overbought side for several weeks.  A market that can continue higher while overbought is usually a sign of strength.  But as we saw in the summer of 2007, for all intents and purposes the last hurrah for the bull market, and a couple of other times in 2008, the overbought condition eventually gives in during a bear market, and the declines from there have been pretty sharp.                    Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Earnings reports keep rolling in - some good, some bad.  After the bank nationalization talk yesterday spooked stocks, Geithner's testimony helped propel them back up, after he said things like,  "Currently, the vast majority of banks have more capital than they need to be considered well capitalized by their regulators."  So while stocks jump around between news and earnings releases, we have to try to make some sense of it.  Keep your on on the charts and indicators to try to separate the wheat from the chaff.  Thanks for reading!  See you back here tomorrow. Scribbler's TSP & Economic Report:  The free trial continues through the end of April.  Please click here for more information.